Note: This document has been translated from a part of the Japanese original for reference purposes only. In the event ofany discrepancy between this translated document and the Japanese original, the original shall prevail.

Annual Securities Report(Filed pursuant to Article 24, paragraph (1) of the Financial Instruments and Exchange Act of Japan)
Business year
From January 1, 2023 To December 31, 2023
(105th Fiscal Period)

Bridgestone Corporation(E01086)

105th Fiscal Period (from January 1, 2023 to December 31, 2023)

Annual Securities Report1This document was prepared for printing by adding a table of contents and pages to the Annual Securities
Report, which is in accordance with Article 24, paragraph (1) of the Financial Instruments and ExchangeAct, submitted as data on March 26, 2024 using the Electronic Data Processing System for Disclosure(EDINET) prescribed in Article 27-30, paragraph (2) of the aforementioned act.

2

The document does not include the attachments to the Annual Securities Report submitted as describedabove, but the Audit Report is bound in an unpaginated booklet.

Bridgestone Corporation

Table of Contents
Annual Securities Report for the 105th Fiscal Period
Cover ....................................................................................................................................................................................................1
Part I Information on the Company ......................................................................................................................................................2
I.
Overview of the Company ......................................................................................................................................................21.
Key financial data and trends .............................................................................................................................................22.
History................................................................................................................................................................................63.
Description of business ......................................................................................................................................................7
4.
Subsidiaries and associates .................................................................................................................................................95.
Employees ........................................................................................................................................................................12
II. Business Overview ...............................................................................................................................................................16
1.
Management policy, management environment and issues to be addressed .....................................................................16
2.
Approach to and initiatives for sustainability ...................................................................................................................20
3.
Business risks ...................................................................................................................................................................36
4.
Management analysis of financial position, operating results and cash flows ..................................................................40
5.
Important business contracts ............................................................................................................................................47
6.
Research and development activities ................................................................................................................................48
III.
Facilities ...........................................................................................................................................................................51
1.
Overview of capital expenditures .....................................................................................................................................51
2.
Major facilities .................................................................................................................................................................52
3.
Plans for addition and retirement of facilities ...................................................................................................................56
IV.
Status of the Company .....................................................................................................................................................57
1.
Shares of the Company ....................................................................................................................................................57
2.
Acquisition of treasury stock, etc. ....................................................................................................................................65
3.
Dividend policy ................................................................................................................................................................67
4.
Status of corporate governance ........................................................................................................................................68
V. Financial Information ......................................................................................................................................................... 115
1.
Consolidated Financial Statements, etc. ......................................................................................................................... 116
2.
Non-consolidated Financial Statements, etc. ..................................................................................................................193
VI.
Administrative Information on the Company’s Shares ..................................................................................................209
VII.
Reference Information on the Company.........................................................................................................................210
1.
Information on the parent company or equivalent of the Company ...............................................................................210
2.
Other reference information ...........................................................................................................................................210
Part II Information About Company Which Provides Guarantee to Reporting Company ................................................................212

Audit ReportCover[Document Submitted]
Annual Securities Report[Article of the Applicable Law
Article 24, paragraph (1) of the Financial Instruments andRequiring Submission of This
Exchange Act
Document][Filed to]
Director of the Kanto Local Finance Bureau[Date of Submission]
March 26, 2024
[Business Year]105th Fiscal Period (from January 1, 2023 to December 31, 2023)[Company Name]
Bridgestone Corporation[Company Name (in English)]
BRIDGESTONE CORPORATION[Position and Name of Representative] Shuichi Ishibashi
Member of the Board
Global CEO and Representative Executive Officer[Location of Head Office]3-1-1 Kyobashi, Chuo-ku, Tokyo[Phone No.]+81-3 6836 3162
[Contact for Communications]
Keisuke Murakami,
Director, Global Financial Accounting Division[Nearest Contact]
3-1-1 Kyobashi, Chuo-ku, Tokyo[Phone No.]+81-3 6836 3162
[Contact for Communications]
Keisuke Murakami,
Director, Global Financial Accounting Division[Place Where Available for PublicTokyo Stock Exchange, Inc.
Inspection](2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo)
Fukuoka Stock Exchange(2-14-2 Tenjin, Chuo-ku, Fukuoka)

1

Part I Information on the Company
I. Overview of the Company
1. Key financial data and trends(1) Consolidated financial data
International Financial Reporting Standards

TermYear ended

101st

102nd

103rd

104th

105th

December
2019

December
2020

December
2021

December2022

December
2023

Revenue

Yen in millions

3,507,243

2,695,224

3,246,057

4,110,070

4,313,800

Profit before tax

Yen in millions

335,510

27,412

377,594

423,458

444,154

Profit or loss attributableto owners of parent

Yen in millions

240,111(23,301)

394,037

300,305

331,305

Comprehensive income
attributable to owners ofparentYen in millions

227,517(108,005)

581,731556,730

516,150

Equity attributable toowners of parent

Yen in millions

2,349,378

2,149,958

2,629,883

2,965,835

3,353,592

Total assets

Yen in millions

4,277,016

4,189,327

4,574,892

4,962,203

5,427,813

Total equity attributable toowners of parent per share

Yen

3,336.92

3,053.35

3,734.23

4,333.80

4,898.25

Basic earnings (loss) per
share

Yen

332.31(33.09)559.56432.20483.99Diluted earnings (loss) per
share

Yen

331.76(33.09)558.71431.61483.41

Ratio of equity attributableto owners of parent to total
assets

%

54.9

51.3

57.5

59.8

61.8

Return on equity
attributable to owners ofparent

%

10.0

(1.0)

16.5

10.7

10.5

Price earnings ratio

Times

12.2

–

8.8

10.9

12.1

Cash flows from operating
activities

Yen in millions

505,029

526,947

281,538

268,483

661,433

Cash flows from investing
activities

Yen in millions(261,875)(155,378)

131,701(338,004)(297,719)

Cash flows from financing
activities

Yen in millions(240,458)

18,077(379,321)(364,109)(183,657)

Cash and cash equivalents
at end of period

Yen in millions

432,924

810,546787,542518,905

724,601

Persons

143,589

138,036

135,636

129,262

125,199

Number of employees(Notes) 1. The Bridgestone Group (the “Group”) prepares its consolidated financial statements based on International Financial
Reporting Standards (IFRS) from the 102nd fiscal period, with the transition date of January 1, 2019.
2. Price earnings ratio is not listed for the 102nd fiscal period due to there being a basic loss per share.
3. The average number of temporary employees is omitted since the number is below 10% of the number of employees.
4. On March 31, 2021, FIRESTONE BUILDING PRODUCTS COMPANY, LLC (hereinafter “FSBP”), a subsidiary ofBridgestone Corporation (the “Company”), was sold to Holcim Participations (US) Inc. FSBP has thus been
categorized as discontinued operations. Accordingly, the amounts of revenue and profit before tax for the 102nd fiscal
period have been reclassified to present the respective amounts of continuing operations, excluding the discontinued
operations.
5. On December 10, 2021, the Company decided to newly establish a wholly owned subsidiary through an absorptiontype company split which will succeed the Company’s anti-vibration rubber business, and after transferring allownership of the Group’s anti-vibration rubber business to the wholly owned subsidiary, it will sell all shares of stockin the wholly owned subsidiary to Anhui Zhongding Holding (Group) Co., Ltd. (hereinafter “AZ”). The anti- vibration
rubber business has thus been categorized as discontinued operations. Accordingly, the amounts of revenue and profit
before tax for the 102nd fiscal period have been reclassified to present the respective amounts of continuing operations,excluding the discontinued operations.
6. On December 10, 2021, the Company decided to newly establish a wholly owned subsidiary through an absorptiontype company split which will succeed the Company’s chemical products solutions business, and after transferring all2

ownership of the Group’s chemical products solutions business to the wholly owned subsidiary, it will sell all sharesof stock in the wholly owned subsidiary to Endeavour United II Investment Business Limited Partnership (hereinafter“EUF-2”), which is organized, managed, and operated by an investment fund Endeavour United Co., Ltd. (hereinafter“EU”). The chemical products solutions business has thus been categorized as discontinued operations. Accordingly,
the amounts of revenue and profit before tax for the 102nd fiscal period have been reclassified to present the respective
amounts of continuing operations, excluding the discontinued operations.
7. The Group has adopted International Accounting Standards (IAS) 12, “Income Taxes” (revised in May 2021), fromthe 105th fiscal period. Accordingly, the data for the 104th fiscal period are those after the retrospective application.
Details of the changes in accounting policies are described in “V. Financial Information, 1. Consolidated Financial
Statements, etc., (1) Consolidated Financial Statements, Notes to Consolidated Financial Statements, 2. Basis ofPreparation.”3

J-GAAP

Term
Year ended

101st

102nd

December
2019

December
2020

Net sales

Yen in millions

3,525,600

2,999,018

Ordinary Profit

Yen in millions

316,823

173,802

Profit or loss attributable toowners of parent

Yen in millions

292,598(2,016)Comprehensive income

Yen in millions

237,629(99,079)

Total equity

Yen in millions

2,344,290

2,119,718

Total assets

Yen in millions

3,946,505

3,876,270

Total equity per share

Yen

3,250.37

2,942.56

Earnings or loss per shareYen

404.95(2.86)

Diluted earnings per shareYen

404.28Equity ratio

%

58.0

53.5

Return on equity

%

12.5

(0.1)

Price earnings ratio

Times

10.0

–

Net cash provided by (usedin) operating activities

Yen in millions

464,457

483,938

Net cash provided by (usedin) investing activities

Yen in millions(266,910)(157,772)

Net cash provided by (usedin) financing activities

Yen in millions(198,601)

61,086

Cash and cash equivalents
at end of period

Yen in millions

435,319

810,546

Persons

143,589

138,036

Number of employees–(Notes) 1. The average number of temporary employees is omitted since the number is below 10% of the number of employees.
2. Various figures derived from generally accepted accounting principles in Japan (J-GAAP) for the 102nd fiscal period
have not been audited in accordance with the provisions of Article 193-2, paragraph (1) of the Financial Instruments
and Exchange Act.
3. Diluted earnings per share is not listed for the 102nd fiscal period due to there being a net loss per share despite their
being potential shares.
4. Price earnings ratio is not listed for the 102nd fiscal period due to there being a net loss per share.

4(2) Financial data for the Company
Term

101st

102nd

103rd

104th

105th

Year ended

December 2019

December 2020

December 2021

December 2022

December 2023

Net sales

Yen in millions

867,267

691,683

839,528

981,660

1,007,593

Ordinary Profit

Yen in millions

203,233

96,155292,915

231,918

300,594

ProfitYen in millions

224,719

82,914

167,024

164,341

284,215

Common stock

Yen in millions

126,354

126,354

126,354

126,354

126,354

Total number ofshares issued

Thousands ofshares761,536

713,698

713,698

713,698

713,698

Total equity

Yen in millions

1,312,152

1,294,084

1,373,813

1,304,356

1,457,572

Total assets

Yen in millions

1,975,746

2,097,389

2,135,579

1,911,361

2,121,023

Yen

1,859.05

1,833.40

1,946.44

1,902.07

2,125.55

160

110

170

175

200

[80]

[50]

[85]

[85]

[100]

Total equity per
share
Dividend per
share[Interim
dividend
amount]Yen

Earnings per
share

Yen

311.00117.76237.18236.52415.19Diluted earnings
per shareYen

310.49117.57236.83236.20414.70Equity ratio

%

66.2

61.6

64.2

68.1

68.6

Return on equity

%

16.4

6.4

12.5

12.3

20.6

Price earnings
ratio

Times

13.1

28.7

20.9

19.8

14.1

Dividend payout
ratio

%

51.4

93.4

71.7

74.0

48.2

Persons

14,567

14,85814,745

13,903

14,106

%

99.9

86.3

127.2

125.3

157.1

%

[118.1][126.8][143.0][139.5][178.9]Highest share
price

Yen

4,734.0

4,082.0

5,467.0

5,509.0

6,245.0

Lowest share
price

Yen

3,888.0

2,861.5

3,307.0

4,042.0

4,548.0

Number of
employees
Totalshareholder
return[Comparative
indicator:
TOPIX(dividend
included)](Notes) 1. The average number of temporary employees is omitted since the number is below 10% of the number of employees.
2. From April 4, 2022, the highest share price and lowest share price are those recorded on the Tokyo Stock Exchange(Prime Market). Prior to that, the prices were those recorded on the Tokyo Stock Exchange (First Section).
3. At the beginning of the 104th fiscal period, the Group adopted the “Accounting Standard for Revenue Recognition”(ASBJ Statement No. 29, March 31, 2020) and relevant ASBJ regulations. The key financial data for the 104th fiscal
period reflects the adoption of these accounting standards, etc.

5

2. History
Date
March 1931
October 1935
May 1937
September 1937
February 1942
October 1949
February 1951
October 1961
June 1967
September 1972
September 1973
December 1980
November 1982

April 1984
January 1988
May 1988
January 1989
January 1993
December 1994

December 1994
January 1997

July 1998
November 1999
March 2000
December 2001

February 2003
October 2004
August 2005
July 2006
May 2007June 2014
May 2017
April 2019
September 2021
December 2021

Event
Established Bridgestone Tire Co., Ltd in the city of Kurume, Fukuoka Prefecture in Japan. Commenced
production of automotive tires.
Commenced production of golf balls
Relocated head office to Tokyo
Commenced production of V-belts and rubber hoses
Changed name to Nippon Tire Co., Ltd.
Company split with the establishment of Bridgestone Cycle Company (now, BRIDGESTONE CYCLE
CO., LTD.)
Renamed back to Bridgestone Tire Co., Ltd.
Listed on the Tokyo and Osaka Stock Exchanges
Established joint venture in Thailand, Thai Japan Tyre Co., Ltd. (now, THAI BRIDGESTONE CO., LTD.)
Established joint venture Bridgestone Spalding Co., Ltd. (now, BRIDGESTONE SPORTS CO., LTD.)
Established joint venture in Indonesia, P.T. Bridgestone Tire Indonesia (now, PT BRIDGESTONE TIRE
INDONESIA)
Acquired Uniroyal Holdings Limited (now, BRIDGESTONE AUSTRALIA LTD.) in Australia
Established BRIDGESTONE TIRE MANUFACTURING (U.S.A.), INC. in the U.S. (May 1990, mergedwith BRIDGESTONE/FIRESTONE, INC. (now, BRIDGESTONE AMERICAS TIRE OPERATIONS,
LLC))
Changed name to Bridgestone Corporation
Established Bridgestone Finance Europe B.V. in the Netherlands (now, such operations have beensucceeded by BRIDGESTONE TREASURY SINGAPORE PTE. LTD. in Singapore)
Acquired the Firestone Tire & Rubber Company. (now, BRIDGESTONE AMERICAS TIREOPERATIONS, LLC)
Established BRIDGESTONE FINANCE CORPORATION
Consolidated the sports business into BRIDGESTONE SPORTS CO., LTD.
Bridgestone/Firestone Europe S.A. (now, BRIDGESTONE EUROPE NV/SA) became a holdingcompany structure for European operations with sales and logistics functions in Europe consolidated inthat company
Established BMAH Corporation (now, BRIDGESTONE AMERICAS, INC.) in the U.S.
Acquired Fedstone (Pty) Limited (now, BRIDGESTONE SOUTH AFRICA HOLDINGS (PTY) LTD.),
with the consolidated subsidiary Firestone South Africa (Pty) Ltd. in South Africa (now, BRIDGESTONE
SOUTH AFRICA (PTY) LTD.)
Established Bridgestone/Firestone Poland Sp. z o.o. (now, BRIDGESTONE POZNAN SP. Z O.O.) in
PolandEstablished Bridgestone Middle East FZE (now, BRIDGESTONE MIDDLE EAST & AFRICA FZE) in
the United Arab Emirates
Established BRIDGESTONE TIRE MANUFACTURING (THAILAND) CO., LTD. in Thailand
BRIDGESTONE/FIRESTONE, INC. (now, BRIDGESTONE AMERICAS TIRE OPERATIONS, LLC)
split and reorganized by business with BRIDGESTONE/FIRESTONE AMERICAS HOLDING, INC.
(now, BRIDGESTONE AMERICAS, INC.) as a holding company for management of businesses in theAmericas
Established BRIDGESTONE (WUXI) TIRE CO., LTD. in China
Established BRIDGESTONE (CHINA) INVESTMENT CO., LTD. in China
Acquired PT. Goodyear Sumatra Plantation (now PT BRIDGESTONE SUMATRA RUBBER ESTATE)
in Indonesia
Established BRIDGESTONE ASIA PACIFIC PTE. LTD. in Singapore
BRIDGESTONE AMERICAS HOLDING, INC. (now, BRIDGESTONE AMERICAS, INC.) acquired
Bandag, Incorporated (now, BRIDGESTONE BANDAG, LLC)
Acquired Masthead Industries, LLC (now BRIDGESTONE HOSE AMERICA, INC.) in the U.S.
BRIDGESTONE EUROPE NV/SA acquired Ets Paul Ayme (Holding) & Ayme er Fils SAS (now FIRSTSTOP AYME SAS) in France
BRIDGESTONE EUROPE NV/SA acquired Tom Tom Telematics B.V. (now BRIDGESTONEMOBILITY SOLUTIONS B.V.) in Netherlands
BRIDGESTONE AMERICAS, INC. acquired AZUGA HOLDINGS, INC.
BRIDGESTONE MINING SOLUTIONS AUSTRALIA PTY. LTD. acquired OTRACOINTERNATIONAL PTY. LTD.

6

3. Description of business
The Bridgestone Group (the “Group”) comprises Bridgestone Corporation (the “Company”), 239 subsidiaries(of which 239 are consolidated subsidiaries), and 128 associates (of which 128 are accounted for using theequity method). The Group is engaged in the businesses below through its reporting segments “Japan,” “China,
Asia-Pacific,” “Americas,” and “Europe, Russia, Middle East, India and Africa,” as well as through othersegments.
Reporting segments have been reorganized from the first quarter ended March 31, 2023. Details are describedin “V. Financial Information, 1. Consolidated Financial Statements, etc., (1) Consolidated Financial Statements,
Notes to Consolidated Financial Statements, 6. Operating Segments.”
Name of segment

Japan

China, AsiaPacific

Major businesses

Major companies[Controlling, manufacturing
and sales]

Bridgestone Corporation[Controlling of tire sales]

BRIDGESTONE TIRE
SOLUTION JAPAN CO.,LTD.

[Tire sales]

BRIDGESTONE RETAILJAPAN CO., LTD.
BRIDGESTONE MINING
SOLUTIONS LATIN
AMERICA S.A.
BRIDGESTONE MINING
SOLUTIONS AUSTRALIA
PTY. LTD.

[Chemical and industrial
product sales]

BRIDGESTONE
DIVERSIFIED PRODUCTS
JAPAN CO., LTD.

[Manufacturing and sales ofgolf goods]

BRIDGESTONE SPORTS
CO., LTD.

[Manufacturing and sales ofbicycles, etc.]

BRIDGESTONE CYCLE
CO., LTD.

[Controlling and sales]

BRIDGESTONE ASIA
PACIFIC PTE. LTD.
BRIDGESTONE (CHINA)INVESTMENT CO., LTD.

[Manufacturing and sales oftires]BRIDGESTONE (WUXI)TIRE CO., LTD.
THAI BRIDGESTONE CO.,LTD.
BRIDGESTONE TIRE
MANUFACTURING(THAILAND) CO., LTD.
PT BRIDGESTONE TIRE
INDONESIA[Tire sales]

BRIDGESTONE
AUSTRALIA LTD.

Premium tire business
Solutions business
Chemical and industrial products anddiversified products business [Sports, cycle]

Premium tire business
Solutions business7

Name of segment

Americas

Major businesses

Major companies[Controlling]

BRIDGESTONEAMERICAS, INC.

[Manufacturing and sales oftires]BRIDGESTONE AMERICASTIRE OPERATIONS, LLC
BRIDGESTONE BANDAG,
LLC
BRIDGESTONE CANADA
INC.
BRIDGESTONE DE
MEXICO, S.A. DE C.V.
BRIDGESTONE DO
BRASIL INDUSTRIA E
COMERCIO LTDA.
BRIDGESTONE
ARGENTINA S.A.I.C.

[Tire sales]

BRIDGESTONE RETAILOPERATIONS, LLC[Manufacturing and sales ofraw materials for tires]

FIRESTONE POLYMERS,
LLC[Manufacturing and sales of
air springs]

FIRESTONE INDUSTRIALPRODUCTS COMPANY,
LLC[Controlling and sales]

BRIDGESTONE EUROPE
NV/SA[Manufacturing and sales oftires]BRIDGESTONE POZNANSP. Z O.O.
BRIDGESTONESTARGARD SP. Z O.O.
BRIDGESTONE HISPANIAMANUFACTURING S.L.U.
BRIDGESTONE INDIA
PRIVATE LTD.
BRIDGESTONE SOUTH
AFRICA (PTY) LTD.

[Tire sales]

FIRST STOP AYME SAS
BRIDGESTONE MIDDLE
EAST & AFRICA FZE[Finance and others]

BRIDGESTONE FINANCECORPORATIONBRIDGESTONE
TREASURY SINGAPORE
PTE. LTD.

Premium tire business
Solutions business
Diversified products business [Air springs]

Europe, Russia,
Premium tire business
Middle East, India
Solutions businessand Africa

OthersOther business(Notes) 1. The premium tire business mainly comprises tires for passenger cars, trucks, buses, and specialties tires (for off-theroad mining and construction vehicles, aircraft, agricultural machinery, and motorcycles).
2. The solutions business comprises the retail and service solutions business, the tire-centric solutions business, and themobility solutions business.
3. The chemical and industrial products business mainly comprises hydraulic and high-performance hoses, rubber tracks,
plastic piping, and seismic insolation.
4. The transfer of the Russian business was completed in December 2023.

8

4. Subsidiaries and associates
Name

Location

Common stock /Ownership
Relationship
Investment inratio of
Description of major
Officers
capitalvotingBusinessbusinesses
serving
Loans(Yen inrightstransactions
concurrently
millions)(%)

Leasingoffacilities(Consolidated subsidiaries)

BRIDGESTONE TIRE
SOLUTION JAPAN CO., LTD.

Kodaira, TokyoManagement ofdomestic sale of tires
for replacement
710 market, sale of tires,and development anddeployment ofsolutions business100.0 Yes

No

Purchase of
products fromthe Company

Businessfacilities

Businessfacilities

BRIDGESTONE RETAIL JAPANKodaira, Tokyo
CO., LTD.

300

Sale of tires andautomotive parts(100.0)
Yes
100.0

No

No

BRIDGESTONE LOGISTICS
CO., LTD.

Kodaira, Tokyo

400

Shipping andwarehousing

100.0 YesNo

Shipping andwarehousing of Business
the Company’s facilities
products

BRIDGESTONE DIVERSIFIEDPRODUCTS JAPAN CO., LTD.

Totsuka-ku,
Yokohama

Sale and work on
industrial rubber
400
products andbuilding materials

100.0 Yes

No

Purchase of
products fromand supply of
products to theCompany

Businessfacilities

BRIDGESTONE SPORTS CO.,LTD.

Chuo-ku, Tokyo

3,000

Manufacture and saleof sporting goods

100.0 Yes

No

No

Businessfacilities

BRIDGESTONE CYCLE CO.,LTD.

Ageo, Saitama

1,870

Manufacture and saleof bicycles

100.0 Yes

No

No

Businessfacilities

Manufacture and sale
THB in of off-the-road tires
thousands for mining and11,900,000 construction vehicles
and aircraft tires

100.0 Yes

Yes

Supply of
products to theCompanyNo

BRIDGESTONE MINING
SOLUTIONS LATIN AMERICA Chile
S.A.

Sale and related
services of off-theUSD inroad tires for mining
thousands
and construction
3,000
vehicles andconveyor belts, etc.

67.0 Yes

No

Purchase of
products fromthe Company

No

BRIDGESTONE MINING
SOLUTIONS AUSTRALIA PTY. Australia
LTD.

Sale and related
services of off-theAUD inroad tires for mining
thousands
and construction
7,000
vehicles andconveyor belts, etc.

100.0 Yes

No

Purchase of
products fromthe Company

No

BRIDGESTONE ASIA PACIFIC
PTE. LTD.

Singapore

Management of
SGD in China and Asiathousands Pacific tire
1,623,782 operations and saleof tires100.0 Yes

No

Purchase of
products fromthe Company

No

BRIDGESTONE (CHINA)INVESTMENT CO., LTD.

China

USD in Management of
thousands China tire operations
347,665 and sale of tires

100.0 Yes

No

Purchase of
products fromthe Company

No

BRIDGESTONE (SHENYANG)
TIRE CO., LTD.

China

USD inManufacture and sale
thousandsof tires183,180(100.0)
Yes
100.0

No

Supply of
products to theCompanyNo

BRIDGESTONE (WUXI) TIRE
CO., LTD.

China

USD inManufacture and sale
thousandsof tires
255,040(100.0)
Yes
100.0

No

Supply of
products to theCompanyNo

BRIDGESTONE TIRE
MANUFACTURING VIETNAM Vietnam
LLC

USD inManufacture and sale
thousandsof tires447,800(100.0)
Yes
100.0

No

Supply of
products to theCompany

No

THAI BRIDGESTONE CO., LTD. Thailand

THB inManufacture and sale
thousandsof tires400,000(69.2)
Yes
69.2

No

Supply of
products to theCompanyNo

BRIDGESTONE TIRE
MANUFACTURING(THAILAND) CO., LTD.

Thailand

THB inManufacture and sale
thousandsof tires
6,921,000(100.0)
Yes
100.0

No

Supply of
products to theCompanyNo

PT BRIDGESTONE TIRE
INDONESIA

Indonesia

IDR inManufacture and sale
thousandsof tires10,358,400(54.3)
Yes
54.3

No

Supply of
products to theCompanyNo

BRIDGESTONE AUSTRALIALTD.

Australia

AUD inthousands Sale of tires
205,820(100.0)
No
100.0

No

No

No

BRIDGESTONE SPECIALTY
TIRE MANUFACTURING(THAILAND) CO., LTD.

Thailand9Name

BRIDGESTONE AMERICAS,
INC.

Location

Common stock /Ownership
Relationship
Investment inratio of
Description of major
Officers
capitalvotingBusinessbusinesses
serving
Loans(Yen inrightstransactions
concurrently
millions)
(%)

U.S.

USD inManagement of
thousands
Americas operations
127,002U.S.

USD inManufacture and sale
thousandsof tires
1

U.S.

No

No

(100.0)
Yes
100.0

No

Purchase of
products andraw materials
Nofrom and supplyof products to
the Company

Sale of tires andautomotive
USD incomponents, andthousands
automotive
1
maintenance andrepair services(100.0)
No
100.0

No

No

No

BRIDGESTONE BANDAG, LLC U.S.

Manufacture and sale
USD in of retreading
thousands materials and
1 provision of related
services(100.0)
No
100.0

No

Supply of
products to theCompanyNo

FIRESTONE POLYMERS, LLC

U.S.

USD inManufacture and sale
thousandsof synthetic rubber
1(100.0)
No
100.0

No

Supply of raw
materials to the No
Company

FIRESTONE INDUSTRIALPRODUCTS COMPANY, LLC

U.S.

USD inManufacture and sale
thousandsof air springs
1(100.0)
No
100.0

No

No

No

BRIDGESTONE CANADA INC. Canada

Manufacture and sale
CAD inof tires and sale ofthousands
automotive
20,902components(100.0)
No
100.0

No

Purchase of
products fromthe Company

No

BRIDGESTONE DE MEXICO,S.A. DE C.V.

MexicoMXN inManufacture and sale
thousandsof tires455,998(100.0)
No
100.0

No

Purchase of
products fromthe Company

No

BRIDGESTONE DO BRASIL
INDUSTRIA E COMERCIO
LTDA.

Brazil

BRL inManufacture and sale
thousandsof tires509,788(100.0)
No
100.0

No

Purchase of
products andraw materials
from theCompanyNo

BRIDGESTONE ARGENTINA
S.A.I.C.

Argentina

ARS inManufacture and sale
thousandsof tires201,242(100.0)
No
100.0

No

Purchase of
products fromthe Company

No

Belgium

Management ofEurope, Russia,
EUR inMiddle East, India
thousands
and Africa tire
2,063,963
operations and saleof tires100.0 Yes

Yes

Purchase of
products fromand supply of
products to theCompanyNo

BRIDGESTONE POZNAN SP. Z
PolandO.O.

PLN inManufacture and sale
thousandsof tires558,059(100.0)
No
100.0

No

Purchase of raw
materials from No
the Company

BRIDGESTONE STARGARD SP.
PolandZ O.O.

PLN inManufacture and sale
thousandsof tires572,650(100.0)
No
100.0

No

No

No

FIRST STOP AYME SAS

FranceEUR inthousands Sale of tires
22,178(100.0)
No
100.0

No

No

No

BRIDGESTONE TATABANYATERMELO KFT.

Hungary

HUF inManufacture and sale
thousandsof tires73,311,000(100.0)
No
100.0

No

No

No

BRIDGESTONE HISPANIAMANUFACTURING S.L.U.

Spain

EUR inManufacture and sale
thousandsof tires3(100.0)
No
100.0

No

No

No

BRIDGESTONE MIDDLE EAST
U.A.E.
& AFRICA FZE

AED inthousands Sale of tires
17,000(100.0)
No
100.0

No

No

No

BRIDGESTONE INDIA
PRIVATE LTD.

INR inManufacture and sale
thousandsof tires7,737,041

No

Purchase of
products fromand supply of
products to theCompanyNo

BRIDGESTONE AMERICASTIRE OPERATIONS, LLC

BRIDGESTONE RETAILOPERATIONS, LLC

BRIDGESTONE EUROPE
NV/SA

India

10

100.0 Yes

Leasingoffacilities(100.0)
Yes
100.0

No

Name

BRIDGESTONE SOUTH
AFRICA (PTY) LTD.

BRIDGESTONE SINGAPORE
PTE LTD.

BRIDGESTONE FINANCECORPORATIONBRIDGESTONE TREASURY
SINGAPORE PTE. LTD.

Location

Common stock /Ownership
Relationship
Investment inratio of
Description of major
Officers
capitalvotingBusinessbusinesses
serving
Loans(Yen inrightstransactions
concurrently
millions)(%)

Leasingoffacilities

South Africa

ZAR inManufacture and sale
thousandsof tires207(75.0)
No
75.0

No

Purchase of
products andraw materials
from theCompany

Singapore

USD inSale and purchase of
thousands
natural rubber
674

100.0 YesNo

Supply of raw
materials to the No
CompanyNo

Settlement ofsome of theCompany’s
payables andNo
partially
entrusted service
for accounting

Kodaira, Tokyo

Lending, factoringand entrusted
50 processing ofaccounting andpayroll calculation

100.0 Yes

No

Singapore

USD inLending andthousands
factoring
450,700

100.0 Yes

No

Collection
agency for someof theNo
Company’s
receivables

U.S.

USD inthousands Sale of tires
20,862(50.0)
No
50.0

No

No

No

No

Purchase of
products andraw materials
from theCompany

No

Other: 199 companies(Equity-method associates andothers)TIREHUB, LLC

BRISA BRIDGESTONESABANCI LASTIK SANAYI VE Turkey
TICARET A.S.

TRY inManufacture and sale
thousandsof tires305,11743.6 Yes

Other: 126 companies(Notes) 1. BRIDGESTONE TIRE SOLUTION JAPAN CO., LTD., BRIDGESTONE SPECIALTY TIRE MANUFACTURING(THAILAND) CO., LTD., BRIDGESTONE ASIA PACIFIC PTE. LTD., BRIDGESTONE (CHINA) INVESTMENT
CO., LTD., BRIDGESTONE (SHENYANG) TIRE CO., LTD., BRIDGESTONE (WUXI) TIRE CO., LTD.,
BRIDGESTONE TIRE MANUFACTURING VIETNAM LLC, BRIDGESTONE TIRE MANUFACTURING(THAILAND) CO., LTD., BRIDGESTONE AUSTRALIA LTD., BRIDGESTONE AMERICAS, INC.,
BRIDGESTONE AMERICAS TIRE OPERATIONS, LLC, BRIDGESTONE ARGENTINA S.A.I.C.,
BRIDGESTONE EUROPE NV/SA, BRIDGESTONE POZNAN SP. Z O.O., BRIDGESTONE STARGARD SP. Z
O.O., BRIDGESTONE TATABANYA TERMELO KFT., BRIDGESTONE INDIA PRIVATE LTD., BRIDGESTONESINGAPORE PTE LTD., and BRIDGESTONE TREASURY SINGAPORE PTE. LTD. are specified subsidiaries.
2. Figures in parentheses in the ownership ratio of voting rights column indicate indirect ownership ratio.
3. Revenues of BRIDGESTONE AMERICAS TIRE OPERATIONS, LLC (hereinafter “BATO”) and BRIDGESTONERETAIL OPERATIONS, LLC (hereinafter “BSRO”) (excluding internal sales from intercompany transactions within
the Group) exceed 10% of the consolidated revenue.
(Yen in millions)
Major financial
information

BATO(1) Revenue(2) Profit before tax(3) Profit

BSRO

1,191,323
124,551
123,121(4) Total equity

1,627,877(5) Total assets

1,815,288(1) Revenue

704,631(2) Profit before tax

42,874(3) Profit

42,848(4) Total equity

319,316(5) Total assets

492,31911

5. Employees(1) Consolidated companies(As of December 31, 2023)
Name of segment

Number of employeesJapan

26,384China, Asia-Pacific

17,513

Americas49,513

Europe, Russia, Middle East, India and Africa

20,419

Other

8,041

Company-wide (common)

3,329

Total

125,199(Notes) 1. The number of employees represents the number of active employees.
2. The number of employees in the Japan segment includes the number of employees at tire plants in Japan that produce
tires for other segments.
3. The transfer of the Russian business was completed in December 2023.

(2) Status of the Company(As of December 31, 2023)
Number of employees

Average age (Years)

Average length of service(Years)Average annual salary(Thousands of yen)

14,106

41.6

15.2

7,483

Name of segment

Number of employeesJapan

10,139

Other

638

Company-wide (common)

3,329

Total

14,106(Notes) 1. The number of employees represents the number of active employees.
2. The average annual salary includes bonuses and extra wages.

(3) Labor union
The Company’s labor union is a member of the Japanese Trade Union Confederation (JTUC-RENGO).
There are currently no particular matters concerning relations with the labor union that require mentioning.
Labor-management relations are founded on mutual trust and are extremely amicable.
Stable labor-management relations are maintained at consolidated subsidiaries and there are no particularmatters that require mentioning.
(4) Percentage of female employees in managerial positions, rate of male employees who took childcare leave
and wage disparities between male and female employees
Since its founding in 1931, the Group has a history of valuing diverse talent and globally fostering diversity
through the acquisition of Firestone Tire & Rubber Company in the U. S. in 1988, etc. In an era where change
has become commonplace, we believe that diversity will become increasingly important for the future growthof the Group as we aim at being attentive to and supportive of problems encountered by society and its
customers and providing solutions in that regard. The Group will strive to enhance corporate value by added
value creation aligned with its business strategy. At the same time, we will accelerate various initiatives basedon the Group’s talent strategy, which aims to allow diverse talents to shine through spreading success andgaining confidence of individuals.

12

(Explanation regarding percentage of female employees in managerial positions)
In order to respect diverse values and promote diversity in decision-making as an organization, the Groupis focusing on promoting the development and assignment of female leaders. In Japan, the Group isenhancing its female employee career support such as that of the Program for empowering and supporting
female talents towards appointment to managers, in addition to supporting retention of female employees
in a manner that enables them to continue working in a manner suited to their individual circumstances inalignment with their diverse life stages, in part by strengthening recruitment of female employees, retaining
and empowering them by their work-life balance, and introducing a FemTech program. The Company has
set a measurable goal of increasing the percentage of female managers to 7.5% by the end of 2025. As of
December 2023, this percentage stands at 4.3%, and the Company is working toward this goal.

(Explanation regarding rate of male employees who took childcare leave)
The Group engages in various initiatives such as those that involve establishing training on the theme ofunconscious bias and promoting awareness-raising activities with its sights set on reforming preconceived
notions regarding gender role divisions and transforming the corporate culture. We will continue our efforts
that entail developing various opportunities for diverse talents to shine on a Group-wide basis. The rate ofmale employees who took childcare leave has increased steadily compared to the previous fiscal year
(15.6%).

(Explanation regarding wage disparities between male and female employees)
There is no disparity in the wage structure or system between male and female employees in the Group.
However, there is a difference between male and female employees as a result of current talent portfolio interms of job categories and the percentage of managerial positions, resulting in wage disparities. In
promoting our aim of “developing various opportunities for diverse talents to shine,” which is the axis of
the Group’s talent strategy, we are putting efforts to have our talent portfolio more balanced, enhancing
participation of female managers in key positions and strengthening recruitment of female employees alongwith improving working environment at manufacturing sites as well.

Diversity related metrics for the Company and domestic consolidated subsidiaries are as follows.

1)

The Company

Company name

Percentage offemaleemployees inmanagerial
positions (%)(Notes 1 and 4)

Bridgestone Corporation

2)

Rate of male
employees who
took childcare
leave (%)
(Notes 2, 4 and 5)

4.3

27.9

Wage disparities between male and female
employees (%)(Notes 3, 4 and 7)
Of which,
Of which,
part-time andAll employees
regularfixed-term
employees
employees
82.4

83.6

67.1

Consolidated subsidiaries

Company name

BRIDGESTONE TIRE SOLUTION
JAPAN CO., LTD.

Percentage offemaleemployees inmanagerial
positions (%)(Notes 1 and 4)

Rate of male
employees who
took childcare
leave (%)
(Notes 2, 4, 5
and 6)

0.7

6.6

13

Wage disparities between male and female
employees (%)(Notes 3, 4 and 7)
Of which,
Of which,
part-time andAll employees
regularfixed-term
employees
employees
67.4

65.3

77.4

Company name

BRIDGESTONE RETAIL JAPAN CO.,

Percentage offemaleemployees inmanagerial
positions (%)(Notes 1 and 4)

Wage disparities between male and female
employees (%)(Notes 3, 4 and 7)
Of which,
Of which,
part-time andAll employees
regularfixed-term
employees
employees

Rate of male
employees who
took childcare
leave (%)
(Notes 2, 4, 5
and 6)

0.0

14.8

66.2

72.4

104.6

0.0

17.6

69.3

72.7

74.3

BRIDGESTONE TIRE SERVICEWESTERN JAPAN CO., LTD.

0.0

15.4

67.4

71.5

69.3

BRIDGESTONE TIRE CENTERNISHINIHON CO., LTD.

0.0

16.7

66.0

69.5

72.5

BRIDGESTONE BRM CO., LTD.

0.0

7.7

64.4

75.0

46.7

4.8

40.0

81.1

82.7

88.6

0.0

33.3

57.8

61.9

45.5

0.0

25.0

72.8

75.7

62.5

0.0

50.0

67.5

72.6

71.5

3.3

36.4

65.6

66.7

47.9

1.2

30.0

72.2

72.3

71.5

0.0

–

69.9

75.1

55.0

BRIDGESTONE CYCLE CO., LTD.

0.7

36.4

65.9

61.7

115.5

BRIDGESTONE SPORTS CO., LTD.

6.4

0.0

76.1

74.8

64.5

1.4

0.0

58.9

67.7

62.3

BRIDGESTONE SOFTWARE CO.,
LTD.

12.5

53.8

79.0

78.3

95.2

BRIDGESTONE EMPOWERMENT
CO., LTD

60.0

0.0

110.1

112.8

96.3

LTD.
BRIDGESTONE TIRE SERVICEEASTERN JAPAN CO., LTD.

BRIDGESTONE LOGISTICS CO.,LTD.
TOWA UNYU CO., LTD.
BRIDGESTONE PLANT
ENGINEERING CO., LTD.
ASAHI CARBON CO., LTD.
BRIDGESTONE DIVERSIFIEDPRODUCTS JAPAN CO., LTD.
BRIDGESTONE FLOWTECHCORPORATIONBRIDGESTONE ENGINEERINGMANUFACTURING KAKOUHINCO., LTD

BRIDGESTONE SPORTS SALESJAPAN CO., LTD.

BRIDGESTONE BUSINESS

0.0
0.0
63.3
76.6
63.2
SERVICE CO., LTD.
(Notes) 1. This is calculated based on the provisions of the “Act on the Promotion of Women’s Active Engagement inProfessional Life” (Act No. 64 of 2015). Managerial positions are calculated based on positions equivalent to manager
level or above in each company of the Group. The figures listed represent the percentage of the number of female
employees in managerial positions in the total number of managerial positions as of December 31, 2023.
2. Rate of employees who took childcare leave is calculated based on the rate of childcare leave, etc. taken under Article
71-4, item (i) of the “Ordinance for Enforcement of the Act on Childcare Leave, Caregiver Leave, and Other Measures
for the Welfare of Workers Caring for Children or Other Family Members” (Ordinance of the Ministry of Labor No.
25 of 1991) based on the provisions under “Act on Childcare Leave, Caregiver Leave, and Other Measures for the
Welfare of Workers Caring for Children or Other Family Members” (Act No. 76 of 1991).
This is calculated by the formula: “the number of employees who started childcare leave in the current fiscal year ÷
the number of employees whose spouses gave birth during the current fiscal year × 100.” It may exceed 100% giventhat some employees whose spouses gave birth in the previous fiscal year have taken childcare leave, etc. during thecurrent fiscal year.
3. This is calculated as a ratio of average annual wages of female employees to those of male employees in the current
fiscal year based on the provisions of the “Act on the Promotion of Women’s Active Engagement in Professional Life”

14

(Act No. 64 of 2015). Average annual wages are calculated as “total wages ÷ number of employees.” Total wages
include base salary, extra wages, bonuses, etc., excluding retirement allowances, commuting allowances, etc.
4. Secondees are counted as employees of the companies dispatching them as secondee.
5. The number of male employees who took parental leave is added to the number of male employees who took childcare
leave.
6. A hyphen “-” indicates that there are no eligible employees.
7. Regular employees include full-time employees and permanent contract employees, and part-time and fixed-term
employees include fixed-term contract employees (including retired reemployed employees). Additionally, wages of
employees on overseas assignments and wages during periods of leave (such as childcare leave and sick leave, etc.
due to non-occupational injury and diseases) are excluded from the calculation.

15

II. Business Overview
1. Management policy, management environment and issues to be addressed
The changes in the Group’s business environment continue to occur with complexity at an accelerating pacein all aspects, including international relations, politics, economy, environmental issues, and technologicalinnovation. Also, sustainability initiatives including climate change countermeasures are becoming more andmore important, and these efforts are linked to the CASE and MaaS movements in the mobility industry,
such as the acceleration of the shift to EVs and digitalization. In this business environment, structural changesof the mobility industry, such as the rapid growth of emerging EV manufacturers, continue to progress, andthe value demanded of tires continues to change significantly. In order to survive these unpredictable times,
where change has become commonplace, and to continue to provide social value and customer value as a“sustainable solutions company,” as stated in our vision, the Group has set the “2030 Long Term Strategic
Aspiration-Bridgestone 3.0 Journey” announced in 2022 as a roadmap toward 2031, the 100th anniversaryof its founding. As part of this journey, we are accelerating our transformation to a resilient “excellent”
Bridgestone that transforms change into opportunity, unaffected by continuous change and remaining robust
and flexible like rubber.
Under our Mid Term Business Plan (2021-2023), which reached its final year in 2023, we have taken steps
to return to a “strong” Bridgestone capable of adapting to changes in the business environment. In thepremium tire business, which is our core business, we made investments to lay the foundation for future
growth, including in investments to strengthen the production of premium tires such as passenger car highrim diameter (HRD) tires and off-the-road tires for mining vehicles, as well as of retread tires, and to place
an even greater focus on premium areas. Conversely, in the solutions business, which we have positioned asa growth business, we worked to achieve growth by deepening the linkage with the premium tire business.
However, from the perspective of potential growth and profitability, we decided to discontinue somesolutions for passenger car tires in Europe and the U.S., and other issues remain for future growth. In lightof such results for the Mid Term Business Plan (2021-2023), in 2024, we will swiftly implement PDCA
(Plan-Do-Check-Act) cycles to ensure continuous improvements and Management, Working & businessquality improvement.
In our new Mid Term Business Plan (2024-2026: for the fiscal year 2026, revenue of 4,800 billion yen,adjusted operating profit of 640 billion yen, adjusted operating profit ratio of 13%, ROIC of 10%, and ROEof 11%), with 2024 as the first year, we will continue driving management based on three axes, which wehave continued to do since the Mid Term Business Plan (2021-2023). The first of these is to “Tackle past
negative legacies squarely without delay,” the second is to “Focus on execution and delivering results for
immediate issues,” and the third is to “Lay foundation for future growth” with the year 2030 as a milestone.
In addition, we will pursue operational excellence across our entire value chain by constantly striving to
improve productivity and perform high-quality work, persisting in ensuring Management, Working &business quality improvement. To this end, we have established “Passion for Excellence” as our management
approach and are pushing forward with initiatives on a global scale. Furthermore, we have set four basic
business scenarios for our Mid Term Business Plan (2024-2026) to focus more on value creation. The first is
to “Create good business quality,” the second is to “Create good tires,” the third is to “Create good business,”
and the fourth is to “Create new business sowing good seeds for the future.”
Our top priority for 2024 is to “Create good business quality.” By persisting in ensuring Management,
Working & business quality improvement, we will return to a strong Bridgestone capable of adapting tochange, which we initially aimed to achieve by 2023. We will pursue operational excellence on a global scaleby placing further focus on respecting being on-site and performing steady PDCA while sticking to basics,
as well as combining continuous improvement and innovation, which is part of Bridgestone DNA. To makethis possible, we have established a more advanced “glocal” management structure, effective January 1, 2024.
Our business has been divided into two regions: BRIDGESTONE WEST, centered mainly in the U.S. andEurope, and BRIDGESTONE EAST, centered mainly in Japan and the rest of Asia. Further down the
structure, we have set 47 “areas” according to the characteristics of the region, market, and business, thereby
establishing a system that focuses on creating value on-site. In the premium tire business, we will pave theway for future growth by reorganizing and restructuring our business to focus more on premium areas, such16

as reducing unprofitable businesses and reorganizing and restructuring the retail business, especially inEurope, a region with low profitability, to strengthen our earning power.
Moreover, after returning to a strong Bridgestone capable of adapting to change in 2024, we will build afoundation for growth with an eye to achieving steady growth from 2025 to 2026 in line with our basic
business scenarios. At the core of this strategy is “Create good tires” and “Create good business.”
In “Create good tires,” we will expand the use of Dan-Totsu products that contain ENLITEN, our basetechnology for product design that we have positioned as a “new premium,” from tires for EVs and othernew vehicles to replacement tires. We will also accelerate value creation by promoting the introduction of
Bridgestone Commonality Modularity Architecture (BCMA), a manufacturing technology that streamlines
the manufacturing and development processes and optimizes costs. To expand our Dan-Totsu products, wewill improve our price position by making efforts to have customers recognize the value of these products.
We will also continue reinforcing efforts to increase our sales and market share of Bridgestone
MASTERCORE, a Dan-Totsu product adopted in off-the-road tires for mining vehicles, and premium tires
for passenger cars, trucks and buses.
As for “Create good business,” we aim to amplify the value of Dan-Totsu products during customers’ tire“use,” as well as evolve our sales and service channels by expanding our number of retail sites and enhancing
the quality of services offered. In particular, in Japan and the U.S., we plan to provide high-quality services
and solutions by working closely with each customer on-site to solve their problems. Alongside this, we will
strengthen our “real” sites that provide high-quality services and solutions, as well as our services that utilize
digital technologies, such as e-commerce. In addition, we will embark on new corporate branding activities
centered on sustainable global motorsports. Through these activities, we plan to continue supporting thedevelopment of motorsport culture. We will also express our passion for racing and our position to “achallenge for excellence,” which is emphasized in our “Passion to Turn the World” message. In doing so, we
aim to build a sustainable premium brand while resonating with many stakeholders, thereby enhancing
corporate value.
Finally, in the fourth scenario, “Create new business sowing good seeds for the future,” we will lay thefoundation for achieving our 2030 Long Term Strategic Aspiration-Bridgestone 3.0 Journey, including theperiod of the next Mid Term Business Plan starting in 2027. First, in solutions for industrial products (tires
for mining vehicles, aircraft, trucks and buses), we will embark on evolving our tire wear prediction solutions
to tire durability prediction solutions by building unique algorithms that make full use of “digital” and our“real” strengths cultivated on-site, such as Dan-Totsu products and other services. In tire solutions for mining
vehicles and aircraft, we will promote co-creation with customers to create value. As for tire solutions fortrucks and buses, we will expand the Fleetcare service we offer customers, particularly in the U.S. This
service combines premium tires, retreading, maintenance, and fleet management solutions under a single
package. We will develop these businesses as our mobility tech business.
In the chemical and industrial products and diversified products businesses, we will focus on areas where wecan leverage our strengths and enhance our hydraulic hose business, etc. In the exploratory business, we will
push forward with efforts to move from technology development through to commercialization for therecycling business, soft-robotics business, and guayule business.
With regard to sustainability, which is at the core of our management and business, we will endeavor to
evolve the Group’s unique Sustainability Business Model that ensures the link between business model andsustainability initiatives to realize carbon neutrality and circular economy across the value chain—“produce
and sell” and “use” of products, and their “renew” to raw material.
Particularly on the environmental front, we set our long-term environmental vision toward 2050 in 2012, and“Milestone 2030,” the mid-term environmental targets toward 2030 to realize this vision. In terms of carbon
neutrality, we have set clear-cut targets of reducing CO2 emissions (Scopes 1, 2) (Note) by 50% in 2030
compared to our 2011 baseline, and achieving carbon neutrality by 2050. We estimate an approximate 50%
reduction in 2023, above the goal of a 30% reduction. The ratio of renewable energy (electricity) at our global
plants, which we are working to increase as part of efforts to reduce CO2 emissions, is expected to beapproximately 60% by 2023, also exceeding the goal of 50%. We will proceed with initiatives to achieve ourgoal of 100% by 2030. As for the reduction of CO2 emissions across the value chain (Scope 3) (Note), we
17

will drive initiatives with the target of contributing to reducing more than five times the total of Scope 1 andScope 2 emissions by 2030 (base year: 2020) throughout the lifecycle of our products, services, and solutions.
In order to realize a circular economy, we aim to increase the ratio of recycled and renewable resources to
40% by 2030 and to achieve 100% sustainable materials by 2050. Regarding the ratio of recycled andrenewable resources, we estimate having achieved a ratio of approximately 37% in 2023. We will continue
efforts to evolve our product strategy, including ENLITEN and retreading, and enhance the utilization ofrenewable resources in the recycling business, the natural rubber business, and the guayule business. In
addition, during the entire period of the Mid Term Business Plan (2024-2026), we will further step up ourefforts to help achieve a nature-positive world, such as preventing deforestation and supporting small-scale
farmers. With regards to these sustainability initiatives, by carrying out sustainable global motorsport
activities, we are striving to promote sustainability across the entire motorsport tire value chain, from raw
material procurement to recycling, as quickly as possible. In doing so, we also aim to evolve into a company
with management that is agile and sustainable across the board.
In addition, as the business environment is constantly changing, we will strengthen our structure to cope with
global management risk unaffected by change. The Global Management Risk Committee, which consists ofthe top management of each regional business, conducts wide-ranging discussions on management risks andhas set three priority management items. Project teams established for each item will push forward with theefforts to identify possible risks to each item and countermeasures. The first is geopolitical risk. We analyze
the business impact when risks occur, consider measures to minimize it, organize the implementation system,and promote to implement measures to ensure employee safety, protect assets, respond to customers, protect
corporate and brand image, and consider and secure alternative sourcing of raw materials. The second item
is our response to TRWP (Tire Road Wear Particles) and 6PPD (a chemical widely used in the tire industry
to prevent degradation). TRWP is the result of friction between the tire and the road surface, which is essential
for ensuring safe and secure tire movement, and is a mixture of the tread, which is the surface of the tire, androad pavement materials. In response to TRWP, which is an industry-wide issue, as an industry leader, theGroup is leading tire industry projects under the World Business Council for Sustainable Development(WBCSD), as well as initiatives by regional industry groups. Furthermore, in collaboration with otherindustry players and academic institutions, we are investigating the environmental and health impacts of tires
throughout their lifecycle. As we advance, we will continue driving relevant initiatives, including promotionof long-life products and linkage with the solutions business. Regarding 6PPD, the industry as a whole isengaging with the issue and evaluating alternatives. The third item is our response to cyberattacks. In thefirst quarter of 2022, a cyberattack occurred in the Group’s U.S. subsidiary, and we implemented emergency
measures in each region. In the future, to strengthen our response to such situations, we established a global
cyber security team and promote fundamental measures. We conducted global assessment in 2023, and we
promote the establishment of the Group’s global standards for responding cyberattacks.
With regard to our talent, the driving force behind all of these corporate activities, we aim to reinforce talent
investment to increase added value and create a virtuous cycle of value creation based on improving
productivity and creativity. From 2023, we have experimented with adding Talent creativity as a global
management KPI as a means of tracking progress with these efforts. Even amid the challenging businessenvironment, we are expanding talent investment, and in Japan in particular, we are working to create acomfortable workplace where diverse talent can shine. These initiatives include reskilling and digital training
programs, conducting the “100-Day Challenge Program,” a development program to enhance on-siteexperiences, introducing a FemTech program to address women-specific health issues using technology, andimproving the workplace environment at manufacturing sites. From 2024, we plan to strengthen our
initiatives further by officially adding Talent creativity as a global management KPI. We will also promote
the evolution of our corporate culture by linking this to activities related to the enhancement of Talentcreativity.
Going forward, with the Bridgestone E8 Commitment as the axis and guiding vectors to drive management
while earning the trust of future generations, we will commit to the realization of a sustainable society by
co-creating value together with various stakeholders, such as society, partners, and customers, achieving bothsustainability and corporate growth.

18

(Note) Scope 1 refers to CO2 emitted directly by a company (emissions from boilers at in-house plants, etc.),
and Scope 2 refers to indirect emissions from energy sources (CO2 emissions from energy, such as
electric power supplied by other companies and consumed in-house). Scope 3 refers to CO2 emissions
during the stages of procurement of materials, logistics, use by customers, and disposal or recyclingin the product lifecycle.

19

2. Approach to and initiatives for sustainability(1) Sustainability
Since its foundation, the Group has been expanding and evolving its business to meet the changing needs ofsociety and to continue supporting the safe and secure mobility and individuals’ lifestyles in each era. We
believe that it is the Group’s role and responsibility to fulfill its mission of “Serving Society with Superior
Quality,” which involves anticipating changes in society, turning them into opportunities, and contributing
to the realization of a sustainable society through its business and social contribution activities.
We positioned 2020 as the first year of the “third foundation” or Bridgestone 3.0 and announced the MidLong Term Business Strategy, placing sustainability at the core of management and business. The Groupidentified its vision of “Toward 2050, Bridgestone continues to provide social value and customer value asa sustainable solutions company.” At the same time, we have been working toward establishment andevolution of a Sustainability Business Model that ensures a link between business models and initiatives forrealization of a circular economy and carbon neutrality across the Group’s entire value chain, upon releasein 2020 of our “Sustainability Business Framework” for achieving a win-win-win relationship among society,customers, and Bridgestone by striking a balance between creating social and customer value in seeking
sustainable growth of the Group itself.

1)

Governance
The Company has been making progress in developing its corporate governance system as part of its efforts
that involve driving management in line with the Mid Term Business Plan, which is prepared once every
three years based on the Mid-Long Term Business Strategy for achieving its vision under its mission of“Serving Society with Superior Quality” of the Bridgestone Essence. The Company is continuing to improveits corporate governance to strengthen internal controls and evolve as a sustainable solutions company.
The Company’s Board of Directors enlists a corporate governance system aiming to realize the Mid-Long
Term Business Strategy by exercising its supervisory function involving discussions with business divisions
from diverse perspectives via business execution progress reports and information sharing from the businessdivisions. The Board of Directors receives and reviews regular reports on the status of sustainability
initiatives such as achieving carbon neutrality, circular economy, and nature-positive world.
In the business divisions, from January 2024, under the Global CEO, the Group’s business will be divided
into two regions, BRIDGESTONE WEST, centered mainly in the U.S. and Europe, and BRIDGESTONE
EAST, centered mainly in Japan and the rest of Asia, each headed by a Joint Global COO. Under the tworegions, several Strategic Business Units (SBU) have been established, which have been broken down into
detailed business areas to be more closely on-site involvement and to go deeper into issues. Furthermore, inorder to ensure consistency between global and regional strategies and maximize effectiveness and efficiency,
the Company has established a global integration function and has appointed a Global Chief Administration
Officer (CAO), a Global Chief Digital Transformation Officer (CDXO), and a Global Chief Technology
Officer (CTO), etc.
The Global Executive Committee (Global EXCO), consisting mainly of these members, has been establishedas the highest global level executive body within the Group. This committee aims to strengthen the checks
and balances of the Group by debating and discussing management strategy and issues from a global
perspective, which improves the transparency of the decision-making process. The committee approves the
Mid Term Business Plan, which is based on the Mid-Long Term Business Strategy placing sustainability at
the core of management, annual budgets, key investment initiatives, etc. It also manages the progress of theplan.
The Company has designed the remuneration system for Board Members and Executive Officers based on
the following principles of remuneration: “attract and cultivate superior talent,” “support a competitive
remuneration level,” “provide motivation for the execution of business strategies,” and “provide motivationfor enhancing shareholder value.” From fiscal year 2022, the Company adopted the mid- to long-term
incentives aimed at promoting sustainability and transformation initiatives, and achieving Mid-Long Term
20

Business Strategy. The Compensation Committee has set the following five goals and evaluates theachievement.

a. Establishment of the “Bridgestone E8 Commitment” and communication with stakeholders both
inside and outside of the Company
b. Investment in and development of people to increase added value and job satisfaction
c. Carbon neutrality, including reduction of CO2 emissions
d. Circular economy, including increasing the ratio of recycled and renewable resourcese. Activities for achieving a nature-positive world, establishment of Water Stewardship Policy

The following chart provides an overview of the Company’s corporate governance system.

As of March 26, 2024

Details for the corporate governance system and remuneration system, please refer to “(1) Overview ofcorporate governance, 1) Basic approach to corporate governance and implementation of measures, b.
Overview of the corporate governance system,” and “(4) Remuneration for Members of the Board andExecutive Officers, 1) Board Members’ and Executive Officers’ remuneration for the current fiscal year, c.
Calculation method and evaluation results of performance-based remuneration” in “IV. Status of theCompany, 4. Status of corporate governance.”

Under the Global EXCO, the Company establishes committees based on management strategy and issues,and promotes initiatives that each committee works across regions and organizations to resolve issues. With
regard to sustainability, the Global Sustainability Committee (GSC) is responsible for organizing the Group’s
Sustainability Framework and holistically leading the design and implementation of sustainability initiatives.
Under the GSC, working groups of cross-functional, cross-regional leaders from appropriate functions, workon each of the key themes and report on its progress and plans to the committees at least quarterly. The GSC
regularly reviews the priority items while reporting and proposing the progress of initiatives and responses
21

to emerging issues to the Global EXCO. In addition, the GSC continually strengthens its initiatives throughthe PDCA cycle by developing the targets, KPIs and metrics to track progress.

Global sustainability management structure (as of January 1, 2024)

2)

Strategy and risk management
The Group believes that it is essential to build a deeper relationship of trust with its stakeholders while
continuing to promote initiatives that form an indispensable foundation for a responsible company to create
new value for society and customers, and to achieve sustainable growth together with customers and partners.
The Group’s sustainability strategy delineates its trajectory for creating value for society and customers
through its business activities, social contribution activities, and co-creation activities with all partners, andaccordingly identifies the priority items to be addressed to continue to create both social and customer value.

Priority items to be addressed• Establishment and evolution of the Sustainability Business Model: develop readiness toward carbon
neutrality, expand circular economy business activities, and promote nature positive world• Foster trust with customers, partners and local communities: contribute to solving issues in local
communities, and promote road safety education around the world• Natural rubber value chain: sustainable procurement of natural rubber, and reinforce support for smallscale farmers of natural rubber• Human rights: promote initiatives in line with the Global Human Rights Policy and continue
reinforcement of activity levels• Tire and road wear particles (TRWP): in collaboration with other industry players and academic
institutions, investigate the environmental impacts of tires throughout their lifecycle. Continue to promote
initiatives to reduce TRWP with respect to tires across the “produce and sell” and “use” value chain,including promotion of long-life products and collaboration with the solutions business.

22

Sustainability Business Model
The Mid-Long Term Business Strategy placing sustainability at the core of management was formulated torealize its vision “Toward 2050, Bridgestone continues to provide social value and customer value as asustainable solutions company.” With the Mid Term Business Plan as its concrete execution plan, the Groupdrives the Mid-Long Term Business Strategy from framework to execution.
Regarding sustainability which we place at the core of management and business, we are working to establish
Bridgestone’s unique Sustainability Business Model in which we link initiatives focused on the realizationof carbon neutrality and a circular economy to our business model across the entire value chain from the“produce and sell,” “use,” of products to their “renewal” to raw materials.
Over the years, the Group has shown a commitment to living in harmony with nature, based on its“Environmental Mission Statement,” which was refined in 2011. The Group has been implementing
initiatives to achieve its vision of “living in harmony with nature” in order to reduce CO2 emissions andtackle the urgent issue of global warming through technology development aimed at valuing natural
resources. We set our long-term environmental vision toward 2050 in 2012, and disclosed “Milestone 2030,”
the mid-term environmental targets for 2030, in 2020 to realize this vision. In terms of carbon neutrality, we
have set clear targets for reducing its total CO2 emissions (Scope 1 and 2) by 50% compared with 2011 by
2030, and to realize carbon neutrality by 2050. Regarding circular economy, we aim to increase the ratio ofuse of recycled and renewable resources to 40% by 2030 and to achieve 100% sustainable materials by 2050.
In 2023, the Group evolved its Sustainability Business Model and transform it to a regenerative businessmodel in line with the concepts of the SBTs (Note) for nature action framework, namely, to avoid actions
that harm the environment, reduce impact on nature to the greatest extent possible, contribute to therestoration and regeneration of the environment, and fundamentally transform systems. This evolution helps
to achieve a nature-positive world where the Group can help stop and reverse the loss of natural ecosystems.
By advancing sustainability initiatives across the entire value chain, the Group is committed to the“Bridgestone E8 Commitment” of “Energy: Committed to the realization of a carbon neutral mobility society”
and “Ecology: Committed to advancing sustainable tire technologies and solutions that preserve theenvironment for future generations.”

23

Regarding risk management, please refer to control of global management risk described in “1. Management
policy, management environment and issues to be addressed,” and “3. Business risks” in “II. Business
Overview.”(Note) Science-based targets

3)

Metrics and targets
The Group has established metrics and targets in relation to priority items to be addressed in seeking tocontinue to create both social and customer value. We appropriately track progress of our activities forresolving issues under the Company’s corporate governance system of aiming to realize the Mid-Long TermBusiness Strategy based on these metrics and targets.
Progress made on initiatives toward establishing a unique Sustainability Business Model that links ourbusiness with achieving carbon neutrality across the entire value chain, realizing a circular economy, andpromoting a nature-positive world is as follows.

Priority
items to beaddressed
Establishme
nt andevolution ofthe
Sustainability Business
Model

Subcategories
Develop
readinesstowardcarbonneutrality

Targets

Reduce CO2 emissions(Scopes 1 and 2):
Reduce CO2 emissions
by 50% by 2030
(compared to 2011)
Achieve carbon
neutrality by 2050

Progress(2023)

Contribution to the
SDGs

Scopes 1 and 2: 53%
reduction of CO2
emissions (compared to2011) (Note 1)· Energy: Committed
to the realization of acarbon neutral
mobility society

Ratio of renewableenergy (electricity):
64% (Note 1)· Ecology:
Committed toadvancingsustainable tire
technologies andsolutions that
preserve theenvironment for
future generations

Contribute to CO2
reduction (Scope 3):
Contribute to reducing
more than five times ourCO2 emissions by 2030
Expandcirculareconomybusiness
activities

Improve resource
productivity anddevelop longlife/resource-saving
designCreation of value
stated in the
Bridgestone E8
Commitment

Ratio of recycled andrenewable materials:
39% (Note 1)

Contribute to a circular
economy: Increase theratio of recycled andrenewable resources to
40% by 2030 (Note 2)
Use 100% sustainable
materials by 2050

(Note 1) These constitute estimated values as of March 26, 2024, and may be revised upon confirmation
through assurance review performed by third-party organizations.
(Note 2) Within total material weight for tire products including tire casing for retreading
For other ESG-related data, please refer to the Company’s website “Sustainability.”24

(2) Initiatives related to climate change and natural capital loss
As the world becomes increasingly concerned about climate change and the loss of natural capital, there is a
growing movement towards a decarbonized society, as exemplified by the Paris Agreement. Additionally,
efforts to achieve a nature-positive world, as outlined in the Kunming-Montreal Global Biodiversity
Framework, which aims to halt and reverse ecosystem and nature capital loss to put nature on a path torecovery, are gaining momentum. In this context, the Group is working to comprehensively recognize its
risks and opportunities associated with climate change and the loss of natural capital, reflecting these inbusiness strategy.
The main risks we identify in this category are “transition risks” associated with the transition to a
decarbonized society and a society where nature can coexist, and “physical risks” due to climate change andnatural capital loss. Transition risks in Japan and overseas in response to climate change and natural capital
loss involve the introduction of systems and regulations related to carbon taxes, CO2 emission reduction
obligations and emissions trading systems, and systems and regulations related to low-fuel consumption
performance of tires, recycling used tires, water withdrawal and sustainable natural rubber, etc. If the R&D
expenses required to meet the changing needs of society and customers do not produce sufficient results,
there is a risk that the Group’s operating results and financial position may be adversely affected in waysthat include limitations on business activities and increased costs. Physical risks include the risk of stronger
typhoons and increased frequency of flooding and drought, which pose the risk of interrupting businessactivities, risks related to the procurement of raw materials as a result of changing rainfall patterns leading
to poor harvesting of natural rubber, and the risk of lower demand for winter tires due to reduced snowfalls.
On the other hand, we also see these changes in society and customer needs as new opportunities for growth.
Based on the Group’s awareness of the transition risks and opportunities, the Group is advancing initiatives
toward achieving carbon neutrality, circular economy, and nature-positive world, with targets set for 2030 toreduce absolute CO2 emissions (Scope 1 and 2) by 50% compared with 2011 levels, contribute to global CO2
emissions reductions across the lifecycles and value chain (Scope 3) of the Group’s products and services
that exceeds five times the amount of CO2 emissions (Scope 1 and 2) generated by the Group’s operations
compared with 2020 levels, increase the ratio of recycled and renewable material to 40%, and promote water
stewardship plans to reduce water risks at production bases in water-stressed areas. The Group is working tomeet these targets with efforts that include developing new technology that helps reduce CO2 emissions,
reducing emissions at production bases of the Group, reducing the impact on natural capital from water
withdrawal in water-stressed areas, promoting the development and sales of fuel-efficient tires, expanding
our retread tire business, and reducing CO2 emissions across the supply chain and impact on natural capitalthrough collaboration with suppliers. We evaluate the cost of CO2 emission and the effect of reductions basedon internal carbon pricing in order to assess the risks and opportunities associated with an investment. We
are also working to reduce CO2 emissions across the value chain and the impact of various environmental
burdens on natural capital through efforts to build a recycling business that converts used tires back into raw
materials and to improve productivity in the natural rubber business.
Concerning physical risks and their associated opportunities, in line with our Business Continuity Plan (BCP),
we continue to set up systems to ensure an appropriate response should a crisis occur, as well as support forresumption of business activities. We are also working to diversify our sources of natural rubber throughefforts to commercialize guayule, a rubber-producing plant that grows in arid regions.
The Group’s response status in accordance with recommended disclosures on final recommendations of the
Task Force on Climate-related Financial Disclosure (TCFD) and the Taskforce on Nature-related Financial
Disclosure (TNFD) version 1.0, is as follows.

25

1)

GovernanceStatus of the Group’s Response
Recommended disclosures
TCFD

Board of Directors’ oversight ofdependencies, impacts, risks andopportunities

TNFD· The Board of Directors receive and review regular reports on the status ofsustainability initiatives, including achieving carbon neutrality, contributing to acircular economy and progress toward being in harmony with nature.

Management’s role in assessing and · The Global EXCO, the highest level of corporate management, approves andmanaging dependencies, impacts, risks
manages the progress of mid-long term strategies, targets and action plans, including
and opportunities

achieving carbon neutrality, contributing to a circular economy and progress toward
being in harmony with nature.

26

Human rights policies and engagement
activities, and oversight by the Board of–· The Global Human Rights Policy and
the Global Sustainable Procurement

Directors and management, with respecttoindigenous
peoples,
local

Policy of the Group articulate its
strong commitment to respect andcommunities,
stakeholders

support internationally recognizedhuman rights principles such as theaffected

and

other

(TNFD recommended disclosure)

UN Guiding Principles for Businessand Human Rights. The Global
Sustainable Procurement Policy
contains minimum requirements for
suppliers to acquire or use land only
by legal means in accordance with UN
Declaration on the Rights ofIndigenous Peoples, and to follow
Free, Prior, and Informed Consent(FPIC) principles when acquiring land
and assessing any forest development
or creating forest management plans.
The Group promotes theimplementation of these policies
within the Group, with suppliers, andacross the supply chain.
· The Group collaborates with theWorld Wildlife Fund (WWF) to study
and develop a due diligence process
for ensuring the company’s supply
chain is in compliance with the Global
Sustainable Procurement Policy. Onsite ESG audits are conducted forsuppliers, including natural rubber
smallholders, using a self-assessment
questionnaire developed inconjunction with WWF, and risks areevaluated. This questionnaire includes
inquires on the FPIC.
· The Group establishes a grievancemechanism for the natural rubber
supply chain and publicly discloses
the standard operating procedure andstatus of each grievance. We use thegrievance mechanism, among others,
to monitor any potential/actual issues
related to indigenous peoples and local
communities’ rights in our supply
chain.
· The Global EXCO approves andmanages action plans and progress forsustainability, including respect forhuman rights, which are reviewed by
the Board of Directors.

27

2)

Strategy
Status of the Group’s Response
Recommended disclosures
TCFD

Dependencies, impacts, risks andopportunities over the short-, medium-,and long-term

TNFD· The Group comprehensively assesses and manages its dependency and impact on
the climate and natural capital, as well as the risks and opportunities associatedwith climate change and the loss of natural capital. Dependencies, impacts, risks
and opportunities have been identified as follows.
Dependencies on climate and natural capital (Note)· Dependency on nature’s provision of water and biomass in the raw material
procurement stage as well as climate and healthy soil maintenance andregulating services provided by ecosystems.
· Dependency on nature’s provision of water in the tire production stage.
Impacts on climate and natural capital (Note)· Impact of land use in the raw material procurement stage.
· Impact of water resource usage and waste generation in the tire production
stage.
· Impact of greenhouse gas emissions, water resource usage, emissions to air,water and soil and waste generation throughout the value chain.
Physical risks and opportunities related to climate change and loss of natural
capital· Risks of stronger typhoons and increased frequency of flooding and drought,

Impact on business model, value chain,strategy, and financial planningwhich pose the risk of interrupting business activities.
· Risks related to the procurement of raw materials as a result of changing rainfall
patterns leading to poor harvesting of natural rubber.
· Risk of lower demand for winter tires due to reduced snowfalls.
· Opportunities to commercialize natural rubber derived from guayule, which
grows in arid regions. Risks due to poor harvesting of natural rubber derived
from Para rubber trees, which are found predominantly in tropical regions.
Risks and opportunities related to the transition to a decarbonized society and asociety in harmony with nature· Risk of adverse effects on operating results and financial position, such as
limitations on business activities and increased costs, if R&D expenses required
to meet the rapidly changing needs of society and customers do not produce
sufficient results when systems and regulations to combat climate change andloss of natural capital are introduced (for example, carbon taxes, CO2 emission
reduction obligations and emissions trading systems, and systems andregulations related to low-fuel consumption performance of tires, recycling usedtires, water withdrawal and sustainable natural rubber, etc.).
· Opportunities associated with changes in competitive factors due to changes inmobility needs (for example, increased demand for tires for electric vehicles,
increased demand for tires and solutions that help customers reduce CO2
emissions).
· Opportunities to commercialize the recycling business resulting from increased
regulation around the recycling of used tires.
(Note) This refers to the main areas of dependency and impact throughout the value
chain of the tire business that were evaluated as either “very high” or “high” inimportance by the UN Environment Programme World Conservation Monitoring
Centre (UNEP-WCMC) and industrial groups using ENCORE (Exploring Natural
Capital Opportunities, Risks and Exposure).

28

Status of the Group’s Response
Recommended disclosures
TCFD
Resilience of the organization’s strategy,
taking into consideration different
scenarios

TNFD· The Group assesses risks and opportunities based on multiple climate- andnature-related scenarios. It has already begun to address those important risks
and opportunities identified and will continue to do so on a regular basis.

Locations applicable to direct operations, · Expand CO2 absorption and fixation
upstream and downstream· Locations with high integrity

through afforestation of degraded land

· The Group regularly evaluates
production sites located in water stressareas with a risk of declining water
resources in terms of quantity andquality. As of the end of 2023, sevenecosystems and/or areas of decline inintegrity· Areas where biodiversity is of highimportancesites in India, Indonesia, China andother countries were located in river· Water stress areas· Areas where the organization is likely

basins assessed as having “extremely
high water risk.” A water stewardshipplan has been formulated and is being
implemented at all these sites based on

to have significant potential
dependencies and/or impacts(TNFD recommended disclosure)3)

the water situation is each location.

Management of risks and opportunities
Status of the Group’s Response
Recommended disclosures
TCFD

Process for identifying, assessing, andprioritising dependencies, impacts, risks

TNFD· The Group strives to comprehensively and appropriately identify and address risks
and opportunities across its operation while considering the business scale andand opportunities in direct operations
and upstream and downstream value

characteristics of each Group company. The Group identifies risks andopportunities associated with climate and natural capital by considering

chain

dependency and impact throughout the value chain based on evaluations fromENCORE by UNEP-WCMC and others and the Business & Biodiversity

Management process

Interrelationship Map® released by Japan Business Initiative for Biodiversity(JBIB).
· The Group is currently assessing ways to improve its management of businessstrategy risks and opportunities directly related to the execution of the Mid-LongIntegration into and informing theorganization’s overall risk management

Term Business Strategy by setting up a dedicated annual risk management process
under the direct leadership of the Global EXCO, while operational risks related to
day-to-day operations are overseen by the Chief Risk Officer (CRO), who is
responsible for overall risk management and formulating risk response plans.
· Identifying potential risks faced by each region and the Group as a whole on anannual basis; clarifying ownership for those risks not only for the Group as awhole, but also for each business, SBU and division; and implementing risk
management in an autonomous and continuous manner.

29

4)

Metrics and targets
Status of the Group’s Response
Recommended disclosures
TCFD

Metrics used in the assessment andmanagement of risks and opportunities

Metrics used in the assessment andmanagement of dependencies andimpacts

TNFD· The Group sets water withdrawal inwater stress areas, environmental· Establishing targets and regularly
monitoring CO2 emissions (CO2emissions reduction in Scopes 1, 2,
and 3, and the reduction contribution

footprint (amount of hazardous/nonhazardous waste and landfill, VOC

of CO2 emissions throughout the
lifecycle and value chain of theemissions, SOx/NOx emissions), andsize of habitat management area asGroup’s products and services) as oneof the metrics for assessing andmetrics in the assessment andmanagement of nature-related risks,managing climate-related risks andopportunities.

opportunities and impacts andregularly monitors status.

· The Group evaluates the cost of CO2
emission (US$100/tCO2) and theeffect of reductions based on internalcarbon pricing in order to assess therisks and opportunities associatedwith an investment.
Targets and performance in metrics usedin the management of dependencies,
impacts, risks and opportunities· Setting long term environmental vision (2050 and beyond) and mid- term target(2030) to achieve carbon neutrality, contribute to a circular economy and achieve
being in harmony with nature; evaluating and disclosing performance every year.
· Setting targets toward 2030 to reduce our absolute CO2 emissions (Scope 1 and 2)
by 50% compared with 2011 levels, contribute to global CO2 emissions reductions
across the lifecycles and value chain (Scope 3) of the Group’s products andservices exceeding five times our operation’s CO2 emissions (Scope 1 and 2)
compared with 2020 levels, increase ratio of recycled and renewable material to40%, and promote water stewardship plans to reduce water risks at production
bases in water-stressed areas.
· The main results for targets toward 2030 are as follows.
Priority items to be addressed
Develop
readiness toward
carbon neutrality

Establishment
and evolution of
the Sustainability
Expand circularBusiness Modeleconomybusiness
activities(Note 1)

Metrics

2022 results

2023 results

2030 targets

Reduce absolute
CO2 emissions(Scopes 1 and 2)
compared with2011 levels

31%

53% (Note1)50%

Ratio of recycled
and renewablematerial (Note 2)

38%

39% (Note
1)

40%

These constitute estimated values as of March 26, 2024, and may berevised upon confirmation through assurance review performed by third-party
organizations.
(Note 2)
Within total material weight for tire products including tire casing for
retreading(3) Initiatives related to human capital and diversity
1)

Strategy
Having evolved its management approach from that of “crisis response” to “Passion for Excellence,” which
expresses a passion for pursuing the top priority on Management, Working & business quality improvement,
under its Mid Term Business Plan (2024-2026), with 2024 as the first year, the Group will focus more on
30

value creation in accordance with the “Business shaping scenario,” which consists of four scenarios: “Create
good business quality,” “Create good tires,” “Create good business,” and “Create new business sowing good
seeds for the future.” Among the “Business shaping scenario,” we will place top priority in 2024 on
Management, Working & business quality improvement, namely entailing the objective of “Create goodbusiness quality.” In advancing such initiatives, we believe it essential that we engage in efforts to enhance
productivity and creativity of every employee (Talent creativity), given that our employees form thefoundation for all of our corporate activities and serve as the driving force in that regard. It is also essentialthat we develop a working environment conducive to such aims.
• Enhancing productivity and creativity (Talent creativity) of every employee
The Group strives to enhance corporate value by added value creation aligned with its business strategy inseeking to promote its talent strategy aligned with its business strategy. At the same time, the Group engages
in various initiatives in striving to achieve sustainable growth with its sights set on maximizing added value
and improving productivity and creativity of every employee, as the axis of our Talent strategy, which aims
to allow diverse talents to shine through spreading success and gaining confidence of individuals. We began
experimenting with “Talent creativity” as a benchmark reflecting such initiatives in 2023, and haveaccordingly introduced “Talent creativity” as a global management KPI to the Mid Term Business Plan
(2024-2026). Our basic approach to “Talent creativity” is that of reinforcing talent investment to increase
added value and create a virtuous cycle of value creation. We set “Talent creativity KPI” as one standard asa global company and work on issues by region / by country while tracking global progress through its KPI(adjusted operating profit (value added) divided by talent investment (sum of labor expense, training anddevelopment expense, and welfare and benefit expense)).
In seeking to promote this talent strategy and enhance Talent creativity, we engage in initiatives to address
our globally common priority items of “Securing Bridgestone-like talent,” “Talent development,”“Improving Working Environment,” “Creating a place where diverse talent can shine.” We have also
embarked on initiatives for visualization of both talent and position in seeking to promote and strengthen ourtalent portfolio in alignment with our business strategy.

Talent creativity KPI• Securing Bridgestone-like talent: Management, Working & business quality improvement
Since its founding, the Group has been expanding and evolving its business to meet the changing needs ofsociety while continuing to support the mobility of people and objects with safety and peace of mind, guided
by its unwavering mission of “Serving Society with Superior Quality.” Bridgestone DNA in terms of its“focus on quality,” “respect for being on-site (Genbutsu-Genba),” “being attentive and supportive ofcustomer problems,” and championing a “challenging spirit” has been shaped and refined over the course of
its history through its journey of taking on challenges. We believe that “Securing Bridgestone-like talent” interms of individuals who empathize with and embody these four elements of our DNA is essential when it
comes to our aims of working toward the notion of “becoming a resilient “excellent” Bridgestone thattransforms change into opportunity, unperturbed by continuous change while remaining robust and flexible
like rubber,” as set forth in the “2030 Long Term Strategic Aspiration-Bridgestone 3.0 Journey,” and also forManagement, Working & business quality improvement, namely entailing the objective of “Create goodbusiness quality,” in the Mid Term Business Plan (2024-2026) with 2024 as the first year. And the foundationof this is our unique “Deming Plan,” which was formulated in the 1960s toward receiving the Deming
Application Prize, given to companies that demonstrate distinguished and comprehensive quality
management. We were awarded the Deming Application Prize in 1968, and our quality management
31

activities are strongly reflected in the Group’s mission “Serving Society with Superior Quality” and “focus
on quality,” which is part of Bridgestone DNA. Our “Continuous Improvement” activities implemented onsite while embodying the notion of “respect for being on-site (Genbutsu-Genba)” serve as our global asset.
We accordingly believe that improving working & business quality derives from our pursuit of operational
excellence, meaning that we always aim to improve productivity and to perform high quality work in all of
the Group’s operations, achieved by promoting continuous improvement and innovation amid a scenario
where everyone from our leaders and the organization overall to each and every employee embrace this asset.
In seeking to secure and develop Bridgestone-like talent, we began reinforcing our Bridgestone-like Quality
Management Training starting with the Company’s management from 2023, and we will extend it to a wider
level and expand it globally from 2024.

• Talent development (Policy for talent development)
The Group promotes talent development based on a talent strategy aligned with its business strategy. In
seeking to realize objectives of the “2030 Long Term Strategic Aspiration-Bridgestone 3.0 Journey” while
executing the Mid Term Business Plan (2024-2026), we are proceeding with efforts to strengthen Bridgestone
DNA and also accelerating implementation of talent development measures that give rise to a situation whereself-driven talent motivated to take on challenges and achieve growth spur value creation, thereby ensuringthat growth of the Company and that of each and every employee go hand in hand.

a. Enhancing “Challenging Spirit”
Regarding “challenging spirit,” we have been making progress in developing “opportunities for diverse
talents to shine and take on various challenges,” especially in the exploratory business where, in addition toforming alliances with external partners, we have established a corporate venture, Softrobotics Ventures,bringing together diverse talents with an entrepreneurial spirit to create new businesses from scratch to takeon the challenge of early commercialization. The Group encompasses a wide range of business domains,such that include premium tires, solutions, and diversified products, spanning the entire value chain fromupstream (raw materials) to downstream (sale and services). Meanwhile, we believe that embodying thenotion of “challenge spirit” through active engagement is essential in order to provide further value to ourstakeholders, irrespective of the business domain and value chain. The Company is encouraging
transformation of mind-set and behavior in part through introduction of the “Genba (on-site) 100-Day
Challenge Program,” which participants who apply voluntarily take initiative in investigating and verifying
self-identified issues and hypotheses at sites both in Japan and overseas involving various operations, andthe “Management Challenge Program,” which offers junior employees who are motivated to take onchallenges the opportunity to gain management experience early in their careers in serving as premanagement position. In 2023, 15 people took part in the “Genba (on-site) 100-Day Challenge Program”
and ten people took part in the “Management Challenge Program.” We will further extend the reach of the“Genba (on-site) 100-Day Challenge Program” globally from 2024 onward, thereby encouraging even more
employees to take on challenges.

b. Leadership training
The Group engages in business throughout more than 150 different countries, with approximately 80% of its
sales generated overseas. As we build a more advanced “glocal” management structure, we believe thatdeveloping the next-generation management leaders equipped not merely with business expertise but alsowith cross-cultural adaptability is imperative in order to seek sustainable growth and greater corporate value
into the future. As we push forward with leadership training regionally, we have also been developing“Bridgestone NEXT100,” a program to develop the next-generation management leaders, by nominating
approximately 100 talents globally each year to take part in this program, and in part by having them
participate in various management and executive meetings as well as overseas business school training
programs.
32

c. Digital training
We believe that creation of social value and customer value by combining our strong real with digital power
approaches is essential for achieving objectives of the Mid Term Business Plan (2024-2026) and for realizing
objectives of the “2030 Long Term Strategic Aspiration-Bridgestone 3.0 Journey.” In the digital field, we
have been developing and acquiring digital talents globally. As of 2023, we have a digital talents workforce
of approximately 1,600 people globally. In the Company, more than 700 people have participated in the“Digital 100-Day Training” covering a wide range of levels by having employees select a program thatmatches individual digital skill level, since its introduction in 2023.

d. Training for wide employees
We provide motivated talent with opportunities for engaging in continuous learning (training and education)and taking on challenges in seeking to improve productivity and creativity of every employee. We
accordingly believe this goes hand in hand with achieving growth of the Company and that of each and every
employee, and that this is very important when it comes to prompting transformation to a resilient “excellent”
Bridgestone. We will invest in talent development with respect to opportunities for learning and taking onchallenges on a Group-wide basis, taking into account circumstances in respective regions and countries.
The Company has established and operated the “Talent Development College” training framework, which
enlists aims that involve reinforcing skills (job performance and management capabilities) required of all
employees, regardless of department or function, and supporting employees who are self-motivated to takeon challenges and achieve growth. The training framework effectively combines learning with practice tosupport individuals grow and maximize their capabilities, in turn revitalizing the organization andcontributing to achievement of the Company’s business strategies and goals. Moreover, we assess participant
feedback and needs, and conduct annual program reviews and expansion while rigorously implementing the
PDCA cycle.

• Improving Working Environment (Policy for internal workplace environment development)
Based on the belief that the success of diverse talents leads to the creation of value as expressed in the“Bridgestone E8 Commitment,” the Group has created a workplace environment where each and every
employee can play an active role. Positioning the improvement of employee engagement as one of the key
issues in globally promoting culture changes in line with the “Bridgestone E8 Commitment,” we have started
to conduct monitoring through engagement surveys and share good practices from each region. Moreover,
we began conducting globally unified engagement surveys in 2023 in seeking to deepen and make progress
on initiatives based on a common evaluation and activity framework globally, while respecting regional
differences in cultures and characteristics. In Japan, we are taking action to catch up with the disparities
relative to the Group’s overseas locations when it comes to engagement and the domain of diversity, equity
and inclusion (DE&I). Specifically, in Japan, we have introduced a training program in Kurume, the placeof our founding, for newly appointed managers or new employees to instill pride with respect to working for
the Group, thereby providing an opportunity to further experience the founder’s thoughts, Bridgestone DNA
and the Bridgestone Essence (corporate philosophy). Meanwhile, in order to develop a foundation for diverse
talents to shine, we have been promoting a variety of initiatives unique to Bridgestone. This has entailed
increasingly focusing on promoting the development and assignment of female leaders in seeking to respect
diverse values and promote diversity in decision-making as an organization. This has also entailed
developing a foundation for diverse talent to shine by arranging DE&I management workshops for all line
managers and introducing a FemTech program to address women-specific health issues using technology.
The Group’s foundation for corporate management is the notion of “Safety First, Always,” as set forth in our
Safety Mission Statement. Promoting activities to ensure that every employee is able to work in a safe
workplace with peace of mind is an expectation not only of employees but also of our customers and otherstakeholders. As such, this Safety Mission Statement is furthermore essential when it comes to ensuringindustrial safety and hygiene with respect to the Group’s employees and contractors through the application33

of stringent safety standards. The Group will continually update its safety standards to address increasing
ergonomic risks associated with aging of the population, changing regulations, deterioration of machineryand equipment, and introduction of new technologies at sites. We will also earnestly develop awareness ofsafety when it comes to new business initiatives undertaken by the Group.
In addition, in regard to improvement of manufacturing site environment, we are also implementing quickimpact investments that reflect the voices of employees who work at “Genba (on-site)” and are working toenhance benefits, improve the workplace environment, and reduce the workload.

• A place where diverse talent can shine
The Group has been making further progress in developing opportunities for diverse talents to shine and takeon various challenges through multiple initiatives, through which the Group’s aims entail enhancing
employee engagement, creating a new DNA in line with the value creation of the “Bridgestone E8
Commitment,” promoting culture change, and developing female leadership talent as well as arranging for
assignment and placement of such talent. The eight words starting with the letter “E” set forth under the“Bridgestone E8 Commitment” symbolize the axis and guiding principle of Bridgestone-like value creation.
They are incorporated into the Bridgestone Group Awards (BGA), the highest level of employee recognitionin the Group, and the TQM (Total Quality Management) Conference as major review standards. They arealso embedded into daily business and on-site improvement activities. Through engagement surveys andother surveys for gauging various attitudes and behaviors, we will visualize the progress and enhance thequality and level of our activities while implementing PDCA cycles.

2)

Metrics and targets
2026 global targets

2023 global result

130 level

110

Talent creativity KPI(Note) Index trends with the index value
set to 100 for the baseline year of 2019.

Talent creativity: Priority activity
indicators

2026 global targets

2023 global result

Management,
A place
Improving
Working &Talentwhere
Workingbusiness development
diverse talent
Environment
quality
can shine
improvement

Bridgestone-like Quality
a. Activities on Management,
Working & business quality
improvementb. Number of digital talents
c. Number of Genba (On-site)
100-Day Challenge Program
participants
1) Fatalities
d. Safety
performance

Bridgestone-like Quality
Management Training
Management Training- Extend reach to a wider- Enhanced training
level and embark on
starting with theglobal expansion from
Company’s management
2024
Expand to the level ofApprox. 1,600 people●

Started program in Japan
15 people participated in●

2,000 people
Embark on global
expansion from 2024

Expand to the level of 45
initiatives in 2023
people per year in 2026
0

2

2.50

2.76

2) Lost-time
injuries frequency●●

rate (Note 1)34

e. Percentage of female leaders(Note 2)

(Note 1)
(Note 2)
(Note 3)

An increase of 3% incomparison with 2023
levels

●16.1% (Note 3)This is calculated by the formula: (Number of lost-time injuries/Total working hours) x 1,000,000.
It is based on those in managerial positions, including leaders who manage and oversee teams inproduction sites and other sites.
The percentage of female leaders by segment in the Group is as follows.
(As of December 31, 2023)
Percentage of female leaders
Category
Segment

Top managerial

Managerial positions

positions

Junior managerial
positions

Total

Japan

2.2%

7.6%

5.7%

6.2%

China, Asia-Pacific

9.9%

20.8%

10.6%

14.3%

Americas

26.5%

26.6%

21.5%

22.3%

Europe, Russia, Middle
East, India and Africa

3.0%

22.9%

15.1%

17.5%

Total

7.8%

17.9%

15.7%

16.1%

• The percentage is based on the number of active employees.
• “Japan” includes the “Others” and “Company-wide (common)” segments.
• The definitions of each category are as follows.
Top managerial positions:
Officer-equivalent (Executives & VPs)
Managerial positions:
Persons in charge of the management of an organization (LineManagers)
Junior managerial positions:
Persons who contribute to the organization with theirindividual knowledge and experience, or are in a position to
guide the organization’s day-to-day management objectives.

35

3. Business risks
The following provides an overview of risks concerning the state of business and financial information
described in this Annual Securities Report that may have a bearing on investors’ decisions. The Group is awareof these risks, and systematic efforts are made to prevent or minimize the impact of related adverse events on
operations.
Nonetheless, the potential exists for unforeseen or unpredictable risks other than those described below tonegatively affect the operations, business results, and financial position of the Group.
All references to possible future developments in the text are as of March 26, 2024, the filing date of this Annual
Securities Report.

(Processes for evaluating and managing risks)Every year, the Group evaluates and identifies risks faced by various regions and the Group as a whole in termsof their potential impact and likelihood of occurrence. By allowing management to be conducted in anautonomous and continuous manner through clarifying who is responsible for managing the risk, not only for
the Group as a whole, but also for every business, SBU, and division, our Group’s risk evaluation andmanagement system is able to deal with serious management risks under the direct supervision of the Global
CEO.
(1) Risks related to demand and macroeconomic conditions
The Group conducts research and development (R&D), procurement, production, logistics, sales and otherbusiness activities on a global scale. Operating results and financial position are thus subject to trends indemand, interest rates, exchange rates, share prices, and other economic variables in the countries and regions
where we operate. In the current fiscal year, the Group’s revenue by region was 51% from operations in theAmericas; 22% from Europe, Russia, Middle East, India and Africa; 14% from Japan; and 13% from China
and the Asia-Pacific region. An economic downturn in any of these regions could exert a major adverse effecton the operating results and financial position of the Group. Meanwhile, the Group completed the transfer ofthe Russian business in December 2023.
The Group’s business is closely tied to the automobile industry; therefore, the operating results and financial
position of the Group are strongly affected by business conditions in the global automobile industry. Demand
for replacement tires in each country where the Group operates depends on national trends in consumer
spending, automotive fuel prices, and a range of other local market variables. Any combination of trends thatmight cause demand for replacement tires to decline, or to grow at a slower rate, could adversely affect theoperating results and financial position of the Group.
Furthermore, some of the Group’s products, such as hydraulic hoses and large and ultra-large off-the-roadradial tires for mining and construction vehicles, are affected by business conditions in the resources industry
and the civil engineering and construction industries. If these factors reduce demand or slow its projected
rise, the Group’s operating results and financial position may be adversely affected.
Moreover, demand for winter tires (which make a sizable contribution to sales in regions such as Japan,
Europe, and North America) is closely related to seasonal weather trends. A mild winter and a decline indemand in these regions could adversely affect, to some extent, the operating results and financial positionof the Group.
(2) Legal, regulatory, and litigation risk
The Group’s operations around the world are subject to diverse national (and, in Europe, supranational) laws
and regulations, including trade, investment, foreign exchange transactions, taxation systems (includingtransfer pricing), anticompetitive practices, environmental protection, and protection of personal information.
Laws and regulations that affect the Group’s business activities have been established and introduced. These
include labeling systems and regulations regarding tire performance and regulations regarding chemicals in
36

Japan and overseas. Accordingly, new or revised laws and regulations could limit the scope of businessactivities, raise operating costs, or otherwise adversely affect the operating results and financial position of
the Group.
The Group could be subject to lawsuits or to investigations by governmental authorities with regard to its
business activities in Japan or in overseas markets. In the event that an important lawsuit is filed orinvestigation by governmental authorities has commenced, the Group’s operating results and financial
position could be affected.
(3) Risks related to operational disruption
・Natural disasters, wars, terrorist actions, civil strife, and social and political unrest
Globally dispersed operations expose the Group to a broad range of natural and man-made risks that could
constitute force majeure, including natural disasters, such as earthquakes and floods, wars, terrorist actions,civil strife, boycotts, epidemics, energy supply problems, and general social or political unrest. Such events
have the potential to adversely affect the operating results and financial position of the Group. Also, factors
such as abrupt, substantial fluctuations in political or economic matters in Japan or overseas could hinder thecontinuation of the Group’s business activities. Such events have the potential to affect the Group’s operating
results and financial position.
The risk of earthquakes is particularly high in Japan where the Group has numerous key facilities.
Management systematically promotes the seismic reinforcement of the Group’s facilities in Japan based onan order of priority determined from the results of site analyses using seismic diagnostics. In addition, a BCP
has been created in order to facilitate a swift response in event of an earthquake and the quick restoration ofoperations. Operation of this BCP is subject to regular review and improvement. The Group has also
formulated a BCP designed to prioritize the wellbeing and safety of employees, families, and all relatedparties while minimizing the Group’s losses stemming from the spread of H1N1 influenza, COVID-19, andother diseases caused by unknown pathogens. The content of this BCP is continuously expanded based on
feedback from its implementation. Despite the preventive measures, such serious risks could disrupt or
reduce the scale of operations or cause damage to facilities, necessitating expensive repairs or restoration
work. The costs involved could adversely affect the Group’s operating results and financial position.
Operational disruptions at those plants where the production of certain products or materials is concentrated
have the potential to cause greater problems due to the increased possibility of a supply interruption, which
could result in claims for compensation based on breach of supply contracts, or in an erosion of customer
confidence in the Group as a reliable source of supply. Any such developments could have a significantly
adverse impact on the operating results and financial position of the Group.
・Information technology (IT) systems failures
With the drastic rise in the importance of information systems in the Group’s business activities, the Group
is striving to protect systems and data through advancing security and other measures. However, failure ofsuch information systems due to external causes, such as natural disasters and cyberattacks, or throughhuman error, could result in the halt of major operations and services and theft or leakage of confidential or
personal information and data, with the possibility of hindering further business activities. Such incidents
bear the potential to damage the Group’s brand image and lower social trust, adversely affecting its operating
results and financial position.
・Industrial action
Prolonged strikes or other industrial action due to unfruitful labor-management negotiation could cause
operational disruptions, and thereby adversely affect the operating results and financial position of the Group.
Management strives to minimize the risk of labor unrest by fostering good labor-management relations
throughout global operations.

37

(4) Risks related to climate change and natural capital loss
The Group recognizes the risks and opportunities related to climate change and natural capital loss in an
integrated manner and reflects them in its business strategy. The main risks we identify in this category are“transition risks” associated with the transition to a decarbonized society and a society where nature cancoexist, and “physical risks” due to climate change and natural capital loss. On the other hand, we also see
these changes in society and customer needs as new opportunities for growth. Details regarding risks andmeasures for addressing risks are presented in “II. Business Overview, 2. Approach to and initiatives forsustainability, (2) Initiatives related to climate change and natural capital loss.”(5) Risks related to corporate and brand image
The Group strives to enhance its corporate and brand image consistently through global business activities.
Systematic efforts are made to ensure compliance with all applicable laws and regulations and to promote
the highest ethical standards. Programs are in place across the Group to prevent industrial incidents,
particularly fires and any accidents that could cause occupational injuries, and to respond immediately to any
accidents that occur. Despite such preventive measures, serious ethical lapses or industrial accidents, which
are by their nature unpredictable, have the potential to adversely affect the operating results and financial
position of the Group by damaging the image and reputation of the Group, diminishing the general public’s
confidence in the Group, or leading to a drop in share price.
(6) Currency risk
The global distribution of the Group’s R&D, production, logistics, procurement of raw materials and sales
activities requires business transactions in numerous currencies. The Group employs foreign currency
forward contracts to hedge foreign currency-denominated trade receivables and payables, and currency
swaps to hedge foreign currency-denominated loans and borrowings in an effort to minimize the effects ofshort-term exposure to exchange rate fluctuations. However, hedging cannot insulate the Group’s operations
completely from foreign exchange market trends since these operations include extensive import and export
activities worldwide. Fluctuations in exchange rates can thus have an adverse effect on the operating results
and financial position of the Group. Exchange rate fluctuations also affect the consolidated performance of
the Group because results are reported in yen. Changes in exchange rates affect the values recorded forrevenue, expenses, assets, and liabilities in all countries outside Japan when translated into yen. In generalterms, yen appreciation against other leading currencies tends to depress the operating results, while yen
depreciation tends to have a favorable impact.
(7) Risks related to competition
The Group encounters numerous competitors in its respective markets and engages in business amid anintense competitive environment encompassing selling price competition. In addition, the Group may facenegative effects on costs and expenses due to factors such as increases in raw material prices, energy costs
and labor costs. Whereas the Group contends with this business environment through ongoing internal efforts
such as those that involve improving productivity, enhancing cost management, and offering new productvalue to customers and markets, a situation where the Group is unable to offset declining profits throughsuch efforts could adversely affect the Group’s operating results.
The Group’s strategy is based on maintaining a highly competitive technological edge. The Group targets
the development and introduction of products equipped with new and advanced technologies, and then aims
to persuade customers of the value inherent in such technical advances to secure prices sufficient to ensurethat profits fully offset the costs of development. Fierce competition in various fields can sometimes prevent
the Group from recovering development costs through pricing, which can also have an adverse effect on
operating results and financial position.

38

(8) Risks related to product defects
The Group holds customer safety as its highest priority. The Group invests considerable resources inestablishing and maintaining high quality standards for all products manufactured and sold. Management isparticularly sensitive to the importance of quality assurance in tires and other products closely associatedwith human safety. The Group has honed its quality assurance capabilities by upgrading information systems
related to product performance, collecting pertinent market information, and establishing systems to provide
early warning of any potential safety issues that may arise before they become problems. Nonetheless, such
efforts cannot guarantee the complete prevention of product defects or eliminate the chance of an extensive
product recall because product defects could occur due to unpredictable factors. Any such defects or recalls
could result in customer claims for damages, as well as associated litigation costs, replacement costs, anddamage to the Group’s reputation. Product liability claims, class-action lawsuits, and other litigation pose aparticular risk in the U.S.
(9) Risks related to raw materials procurement
Disruption of supplies of raw materials has the potential to affect performance adversely. The Group uses
large quantities of natural rubber in tires and other rubber products, most of which are supplied fromSoutheast Asia. The availability of natural rubber supplies in quantities sufficient for manufacturing purposes
is subject to disruption due to natural disasters, wars, terrorist actions, civil strife, other social or politicalunrest, and strikes in addition to the threat of poor harvests.
Supply shortages due to tight supply of raw materials or capacity constraints are also potential problems withother basic raw materials, and could adversely affect the Group’s operating results and financial position.
The Group relies on in-house upstream raw materials operations and on third-party suppliers for important
raw materials. Any disruption of activity to those operations or suppliers and any other events that impede
the Group’s plants that use those raw materials could adversely affect the Group’s operating results andfinancial position.
Increases in the costs of raw materials due to tight supply, trade for speculative purposes, and other reasonsare also potentially detrimental to the operating results and financial position of the Group. Management
cannot guarantee that price rises can always be passed on to customers or that ongoing efforts to raise
productivity will be sufficient to compensate for any sharp increases in raw materials costs.
(10) Risks related to pension costs and obligations
Pension-related costs and obligations are reliant on actuarial assumptions concerning discount rates and anumber of other variables. If these assumptions were to change significantly as a result of changes in interest
rates or the fair value of plan assets (including pension assets), or other factors were to necessitate a change
in the underlying assumptions, there could be an increase in pension-related costs and obligations, as well asa material impact on the operating results and financial position of the Group.
(11) Risks related to intellectual property
The Group treats intellectual property as an important business resource. Systematic efforts are made to
employ intellectual property effectively in improving the competitive position of the Group, to protect
intellectual property rights from infringement, and to avoid infringing the intellectual property rights of otherparties. Despite such safeguards, any actual or alleged infringement of third-party intellectual property rights
by the Group could have a negative impact on the use of certain materials or technologies by the Group, andcould potentially also trigger the payment of compensatory damages. Any such outcome could have anegative effect on the operating results and financial position of the Group. Conversely, if claims by theGroup of intellectual property rights infringement against third parties are not upheld, the Group could also
suffer direct or indirect losses through the diminished differentiation or competitiveness of its products inglobal markets.

39

4. Management analysis of financial position, operating results and cash flows
Starting in the fiscal year ended December 31, 2023, to evaluate the contributions of our Japanese production
sites to the Group’s global supply chain management, we have changed Japan export profits or losses for our
general tire transactions from the “Corporate or elimination” segment to the “Japan” segment. As a result, thefigures for the fiscal year ended December 31, 2022, have been reclassified into new segment classifications.
In addition, the Group has classified its US building materials business, anti-vibration rubber business, andchemical products solutions business as discontinued operations, thereby deducting such discontinued
operations from monetary amounts for the fiscal year ended December 31, 2022, and the fiscal year ended
December 31, 2023.
Details are described in “V. Financial Information, 1. Consolidated Financial Statements, etc., (1) Consolidated
Financial Statements, Notes to Consolidated Financial Statements, 6. Operating Segments.”
All references to possible future developments in the text are as of the filing date of this Annual Securities
Report.
(1) Overview of operating results, etc.
Overview of the financial position, operating results, and cash flows of the Group for the current fiscal year
is as follows.
1)

Financial position and operating resultsa. Sales and earnings
2023

Increase (Decrease)2022

AmountRatio

Yen in billions

Yen in billions

Yen in billions%

4,313.8

4,110.1+203.7+5

Adjusted operating profit

480.6

482.6

(2.0)

(0)

Operating profit

481.8

441.3

+40.5

+9

Profit before tax

444.2

423.5

+20.7

+5

Profit attributable to owners of parent

331.3

300.3

+31.0

+10

Revenue

The Group has worked in line with its Mid Term Business Plan (2021-2023), released in February 2021, withthe aim of accomplishing its vision of “continuing to provide social value and customer value as a sustainable
solutions company toward 2050” under its mission of “Serving Society with Superior Quality” of theBridgestone Essence. Guided by the mission and vision, we have set the “Bridgestone E8 Commitment” as
our corporate commitment to support a sustainable society with our employees, society, partners andcustomers. This is the focus and vector of value creation. We are moving forward along the path of the “2030Long Term Strategic Aspiration-Bridgestone 3.0 Journey,” which depicts the vision we want to achieve in
2031, the 100th anniversary of our founding.
Amid a more severe business environment than expected, on the backdrop of a slowdown and a slump indemand for replacement tires for trucks and buses in the U.S. and Europe that had been remarkable since thesecond half, in the fiscal year ended December 31, 2023, we focused on “restructuring of the earning power”
in the premium tire business, aiming to return to strong Bridgestone, which is capable of responding tochanges, by “focusing on execution and delivering the results” of the Mid Term Business Plan (2021-2023)
in its final year. We also focused on carefully selecting and making strategic growth investments, withemphases on strengthening premium tire production in the harsh business environment, and “laying
foundation for the future.”40

In the premium tire business, the overall demand environment for replacement tires was challenging, andamid a year-on-year decline in global sales volume, we further strengthened our focus on the premium
domain. With respect to replacement tires for passenger cars, we promoted strategic price management,
concurrently working to reduce losses and unprofitable areas, mainly by expanding sales of high-rim
diameter tires, which have relatively little impact on environmental changes and maintained stable demand.
At the same time, we launched high-performance, high-value-added Dan-Totsu products to thoroughly
improve sales mix. Amid a situation where demand for new tires is becoming more severe than expected, inthe case of replacement tires for trucks and buses in North America, where we have strong business bases
such as high product competitiveness and service base network, we were able to improve our share of new
and retread tires in the premium domain by combining retread tires. In addition, with the foundation of DanTotsu products, tires for mining vehicles, which have demonstrated the strength of respect for being on-site,
such as tire maintenance services, and achieved solid sales and market share gains, underpinned thecompany’s overall performance in a challenging business environment. On the other hand, in the European
business, which has been a management issue for the Group in terms of profitability and business foundation,
weakness in the sales channel base and other factors emerged amid a difficult business environment, andthere remain issues to be addressed for improvement. In the Americas business, in Argentina, where Financial
Reporting in Hyperinflationary Economies (Note) was applied, the impact of a large devaluation of thecurrency significantly pushed down business results, which negatively impacted company-wide performance.
In light of the above, with regard to business results for the fiscal year ended December 31, 2023, a lack of
response to address changes has become apparent, and it has become urgent for us to proficiently manage
indicators to monitor change and quickly adapt to changes so that we can improve the quality and speed of
the PDCA cycle in the coming fiscal year. This has resulted in a challenge for a “strong Bridgestone capableof adapting to change,” which was set as the goal at the beginning of the fiscal year. Revenue increased yearon-year due in part to the tailwind of favorable foreign exchange rates, an improved sales mix that was helpedby sales of replacement premium tires for passenger cars (high-rim diameter tires (18 inches or more), highprofit premium tire brands in each region, etc.), and a year-on-year increase in the sales volume of tires formining vehicles, despite a decline in the sales volumes of replacement tires for trucks and buses in the U.S.
and Europe, for which there was a sharp drop in demand and the impact of applying Financial Reporting inHyperinflationary Economies for Argentina. Adjusted operating profit including foreign currency effects
declined year on year due to significant effects of increased processing costs resulting from deteriorated plant
operation owing to a decrease in sales volume as well as a decrease in profit associated with applying
Financial Reporting in Hyperinflationary Economies for Argentina, despite our continued efforts to offset
negative effects of costs and expenses stemming from raw material prices and inflation (energy and laborcosts, etc.) against improved selling price and sales mix, carry out through cost management and improve
productivity in production sites. The impact of Financial Reporting in Hyperinflationary Economies forArgentina on the year-on-year decline in profits was approximately 10 billion yen. Profit increased year on
year if excluding this impact. Excluding this impact, profits increased year-on-year. The adjusted operating
profit ratio declined 0.6 percentage points from the previous fiscal year to 11.1%, falling short of the previous
fiscal year. We will continue to accelerate our efforts to improve our business structure to respond to changes.
As a result, the Group’s revenue in the current fiscal year was 4,313.8 billion yen, a year-on-year increase of5%; adjusted operating profit was 480.6 billion yen, a year-on-year decrease of 0.4%; operating profit was
481.8 billion yen, a year-on-year increase of 9%; profit before tax was 444.2 billion yen, a year-on-yearincrease of 5%; and profit attributable to owners of parent was 331.3 billion yen, a year-on-year increase of
10%.
(Note) IAS 29 Financial Reporting in Hyperinflationary Economies

41

b. Segment information
Increase (Decrease)

2023

2022

Yen in billions

Yen in billions

Yen in billions%

1,242.4

1,157.1+85.4+7

Adjusted operating profit

206.5

150.6

+55.9

+37

China, Asia-

Revenue

461.1

457.0

+4.1

+1

Pacific

Adjusted operating profit

41.6

39.9

+1.7

+4

2,080.0

1,988.0+92.0+5Adjusted operating profit

212.0

251.2

(39.2)(16)

Europe, Russia,

Revenue

908.5

870.0

+38.5

+4

Middle East,
India and Africa

Adjusted operating profit

25.1

66.4

(41.2)(62)

Revenue

78.4

80.5

(2.1)

(3)

Adjusted operating profit

5.6

7.3

(1.7)

(24)

4,313.8

4,110.1+203.7

+5

480.6

482.6

(2.0)

(0)

Japan

Americas

Revenue

RevenueAmountRatio(Note)
OthersConsolidated

Revenue

Results

Adjusted operating profit(Note) The transfer of the Russian business was completed in December 2023.

[Japan]
Revenue was 1,242.4 billion yen, a year-on-year increase of 7%, and adjusted operating profit was 206.5
billion yen, a year-on-year increase of 37%.
Unit sales of replacement tires for passenger cars and small trucks, and unit sales of tires for trucks and buses
were down year-on-year. On the other hand, in addition to executing strategic price management, we
strengthened our focus on the premium domain by reducing low-margin areas. As a result, the impact ofsoaring raw material prices and inflation was mitigated by improved selling prices and sales mix. Revenue
and profit increased year-on-year due to an increase in the sale of tires for mining vehicles and strong exportsof passenger car tires and truck and bus tires to overseas markets, thanks to the tailwind of the depreciatedyen.
[China, Asia-Pacific]
Revenue was 461.1 billion yen, a year-on-year increase of 1%, and adjusted operating profit was 41.6 billion
yen, a year-on-year increase of 4%.
The total unit sales of new vehicle tires and replacement tires for passenger cars and small trucks were down
year on year, while unit sales of tires for trucks and buses were on par with the previous fiscal year. On theother hand, sales prices in each country in the region improved with an improved sales mix through athorough focus on the premium domain. As a result, revenue and profit increased year on year, supported by
the tailwind of depreciated yen.
[Americas]
Revenue was 2,080.0 billion yen, a year-on-year increase of 5%, and adjusted operating profit was 212.0
billion yen, a year-on-year decrease of 16%.
In North America, the total unit sales of new vehicle tires and replacement tires for passenger cars and small
trucks remained at the same level as the previous fiscal year on the whole, while unit sales of tires for trucks
42and buses fell significantly from the previous fiscal year, due in part to a significant slowdown in demand.
On the other hand, sales prices and sales mix improved steadily. On the cost front, in addition to theworsening of processing costs due to production adjustments caused by inflation and a decrease in unit sales,
a decline in profit associated with applying Financial Reporting in Hyperinflationary Economies forArgentina had a significant impact. As a result, revenue increased and profit decreased year on year despite
the tailwind of foreign exchange rates.
[Europe, Russia, Middle East, India and Africa]
Revenue was 908.5 billion yen, a year-on-year increase of 4%, and adjusted operating profit was 25.1 billion
yen, a year-on-year decrease of 62%.
In Europe, unit sales of replacement tires for passenger cars and small trucks, and unit sales of tires for trucks
and buses fell sharply from the previous fiscal year. In particular, demand for truck and bus tires remainedsluggish, impacting sales significantly. On the other hand, we responded to this by pressing ahead withstrategic price management and reductions in low profitability areas, mainly for replacement tires forpassenger cars. While sales prices and sales mix have improved, there was a large deterioration in processing
costs caused by inflation in terms of costs, and production adjustments due to a decrease in unit sales. Despite
the tailwind of foreign exchange rates, revenue increased and profit decreased year on year.
(Note) The amounts for segment results include inter-segment transactions that are eliminated in calculating
the consolidated results.
c. Financial position(Current assets)
Current assets were 2,697.4 billion yen, increasing by 184.8 billion yen, or 7%, from the end of the previous
fiscal year, as inventories decreased by 16.7 billion yen, and assets held for sale decreased by 25.6 billion
yen, but cash and cash equivalents increased by 205.7 billion yen.
(Non-current assets)
Non-current assets were 2,730.4 billion yen, increasing by 280.8 billion yen, or 11%, from the end of theprevious fiscal year, as property, plant and equipment increased by 181.8 billion yen, and intangible assets
increased by 40.9 billion yen.
(Current liabilities)
Current liabilities were 1,264.8 billion yen, increasing by 179.0 billion yen, or 16%, from the end of theprevious fiscal year, as provisions decreased by 16.1 billion yen, but bonds and borrowings increased by
150.2 billion yen, and income taxes payable increased by 37.3 billion yen.
(Non-current liabilities)
Non-current liabilities were 757.6 billion yen, decreasing by 106.3 billion yen, or 12%, from the end of theprevious fiscal year, as lease liabilities increased by 13.3 billion yen, but bonds and borrowings decreasedby 105.8 billion yen.
Furthermore, total interest-bearing debt (Note) recorded in both current liabilities and non-current liabilities
increased by 63.0 billion yen, or 8%, from the end of the previous fiscal year, to 830.2 billion yen.
(Note) Interest-bearing debt includes bonds and borrowings and lease liabilities.
(Equity)
Total equity was 3,405.4 billion yen, increasing by 392.9 billion yen, or 13%, from the end of the previous
fiscal year, as we recorded profit attributable to owners of parent of 331.3 billion yen, despite a decrease of
130.1 billion yen due to dividends (owners of parent).

43

As a result, total assets at the end of the current fiscal year were 5,427.8 billion yen, increasing by 465.6
billion yen, or 9%, from the end of the previous fiscal year. Furthermore, the ratio of equity attributable toowners of parent to total assets for the current fiscal year was 61.8%, increasing by 2.0 percentage points
from the end of the previous fiscal year.
2)

Cash flows
Increase (Decrease)

2023

2022

Yen in billions

Yen in billions

Yen in billions

Cash flows from operating activities

661.4

268.5

+393.0Cash flows from investing activities(297.7)(338.0)+40.3

Cash flows from financing activities(183.7)(364.1)+180.525.5

65.2(39.7)

205.5(368.5)+574.0Cash and cash equivalents at beginning of
period

518.9

787.5

(268.6)

Net increase (decrease) in cash and cash
equivalents included in assets held for sale

0.2

99.8

(99.7)Cash and cash equivalents at end of period

724.6

518.9

+205.7

Effect of exchange rate changes on cash andcash equivalents
Net increase (decrease) in cash and cash
equivalents

Amount

The Group’s cash and cash equivalents (hereinafter “net cash”) increased 205.7 billion yen during the current
fiscal year, to 724.6 billion yen, compared with a decrease of 268.6 billion yen during the previous fiscal
year.
(Cash flows from operating activities)
Net cash provided by operating activities increased 393.0 billion yen compared with the previous fiscal year,
to 661.4 billion yen. The principal contributors in that cash provided included profit before tax of 444.2
billion yen, compared with 423.5 billion yen in the previous fiscal year, depreciation and amortization of
305.8 billion yen, compared with 282.1 billion yen in the previous fiscal year, a decrease in trade and otherreceivables of 56.8 billion yen, compared with an increase of 139.6 billion yen in the previous fiscal year,
and a decrease in inventories of 85.3 billion yen, compared with an increase of 195.4 billion yen in theprevious fiscal year. These contributors offset a decrease in accounts payable - bonuses of 10.8 billion yen,
compared with 1.3 billion yen in the previous fiscal year, a decrease in trade and other payables of 55.3
billion yen, compared with an increase of 52.5 billion yen in the previous fiscal year, and income taxes paidof 58.0 billion yen, compared with 86.2 billion yen in the previous fiscal year.
(Cash flows from investing activities)
Net cash used in investing activities decreased 40.3 billion yen compared with the previous fiscal year, to297.7 billion yen. The principal contributors in that cash used were payments for purchase of property, plantand equipment of 282.4 billion yen, compared with 221.3 billion yen in the previous fiscal year, paymentsfor purchase of intangible assets of 60.5 billion yen, compared with 33.4 billion yen in the previous fiscal
year, and payments of long-term loans receivable of 21.1 billion yen, compared with 28.9 billion yen in theprevious fiscal year. These contributors offset proceeds from sale of property, plant and equipment of 29.6
billion yen, compared with 27.7 billion yen in the previous fiscal year, proceeds from sale of investment
securities of 27.9 billion yen, compared with 2.9 billion yen in the previous fiscal year, and collection ofloans receivable of 14.9 billion yen, compared with 19.5 billion yen in the previous fiscal year.
(Cash flows from financing activities)
44

Net cash used in financing activities decreased 180.5 billion yen compared with the previous fiscal year, to183.7 billion yen. The principal contributors in that cash used were repayments of long-term borrowings of
20.7 billion yen, compared with 54.1 billion yen in the previous fiscal year, repayments of lease liabilities of
68.4 billion yen, compared with 65.8 billion yen in the previous fiscal year, and dividends paid to owners ofparent of 130.0 billion yen, compared with 119.0 billion yen in the previous fiscal year. These contributors
offset an increase in short-term borrowings of 20.9 billion yen, compared with 21.6 billion yen in the previous
fiscal year, and proceeds from long-term borrowings of 23.1 billion yen, compared with 0.6 billion yen in
the previous fiscal year.
3)

Production, orders received and salesa. Production results
The production results by segment for the current fiscal year are as follows.
Name of segment

Amount (Yen in millions) (Note 1)

YoY Change (%)

Japan

798,975+4.4

China, Asia-Pacific363,838+3.9

Americas1,611,785(1.8)

Europe, Russia, Middle East, India and Africa (Note 2)

741,073

(4.7)

Total

3,515,672(0.5)(Notes) 1. The amounts are based on selling prices.
2. The transfer of the Russian business was completed in December 2023.

b. Orders received
Apart from undertaking made-to-order production for a small number of special products such as special
hoses, all the Group’s production is made to stock.
c. Sales results
The sales results by segment for the current fiscal year are as follows.
Name of segment

Amount (Yen in millions)YoY Change (%)

Japan

946,547+6.4

China, Asia-Pacific398,135+5.7

Americas2,063,073+4.7

Europe, Russia, Middle East, India and Africa (Note)

888,479+3.7

Others17,543+3.8

23(42.0)

4,313,800+5.0

Corporate or elimination
Total(Note) The transfer of the Russian business was completed in December 2023.

45

(2) Management’s analysis and discussion of the operating results, etc.
The following section describes management’s understanding, analysis and discussion of the Group’s
operating results, etc.
All references to possible future developments in the text are as of March 26, 2024, the filing date of thisAnnual Securities Report.
1)

Significant accounting estimates and assumptions used in such estimates
The consolidated financial statements of the Group have been prepared in accordance with International
Financial Reporting Standards (“IFRS”) pursuant to the provisions of Article 93 of the Regulation on
Terminology, Forms, and Preparation Methods of Consolidated Financial Statements (hereinafter the“Regulation on Consolidated Financial Statements”). Significant accounting policies, accounting estimates,
and assumptions used in such estimates for preparing the consolidated financial statements are described in“3. Material Accounting Policies” and “4. Significant Accounting Estimates and Judgements Involving
Estimates” of “V. Financial Information, 1. Consolidated Financial Statements, etc. (1) Consolidated
Financial Statements, Notes to Consolidated Financial Statements.”

2)

Understanding, analysis and discussion of the operating results, etc. for the current fiscal year
The Group’s operating results, etc. for the current fiscal year are as follows.
Factors that have a material impact on the Group’s operating results and measures taken to address suchfactors are described in “1. Management policy, management environment and issues to be addressed.”(Revenue, adjusted operating profit and operating profit)
Revenue, adjusted operating profit and status by segment are described in “(1) Overview of operating results,
etc.” Operating profit increased by 40.5 billion yen (up 9% year-on-year) to 481.8 billion yen due to above
affects, as well as decreases in other expense with large amounts related to one time event of 17.8 billion yen
and impairment losses of 15.7 billion yen.
As a result, the adjusted operating profit ratio was 11.1%, down 0.6 percentage points from fiscal year 2022.
(Profit attributable to owners of parent)
Profit attributable to owners of parent increased by 31.0 billion yen (up 10% year-on-year) to 331.3 billion
yen. This was mainly due to an increase of 40.5 billion yen in operating profit and an increase of 17.1 billion
yen in finance income, despite an increase of 36.4 billion yen in finance costs.
3)

Capital financing and liquidity
Cash and cash equivalents increased by 205.7 billion yen to 724.6 billion yen compared to the end of fiscal
year 2022. The status of cash flow by business activity is described in “(1) Overview of operating results,
etc.”
Regarding financing, in addition to borrowings from financial institutions, we will continue to diversify ourfunding sources to diversify risks and reduce interest costs with methods such as direct financing throughdomestic corporate bonds and commercial paper, securitization of trade receivable, or leasing.
Funds will primarily be used with priority assigned to achieving sustainable growth and enhancing corporate
value by enlisting strategic growth investment to focus on strengthening earning power and creating value,
while building a sustainable premium brand. We will do this while utilizing funds to maintain a strong
financial position and to return an appropriate level of profit to our shareholders.

46

4)

Objective indicators for assessing the status of achievement of the management policy, management
strategy and management goals
As described in “1. Management policy, management environment and issues to be addressed,” the Group
has taken steps to return to a “strong” Bridgestone capable of adapting to changes in the business environment
under the Mid Term Business Plan (2021-2023: for the fiscal year 2023, revenue of 3,300 billion yen,adjusted operating profit of 450 billion yen, adjusted operating profit margin of 13%, ROIC of 10%, andROE of 12%), which reached its final year in 2023.
In the fiscal year 2023, revenue was ¥4,313.8 billion, adjusted operating profit was ¥480.6 billion, adjusted
operating profit margin was 11.1%, ROIC was 8.7%, and ROE was 10.4%.
(Note) ROE is calculated based on the amount of profit attributable to owners of parent from continuing
operations.

5. Important business contracts
No item to report.

47

6. Research and development activities
The Group is taking on the challenge of amplifying the value of our Dan-Totsu products at the customers’ tire“use” phase by positioning the premium tire business as a core business and enhancing its linkage with thesolutions business. We are also promoting various initiatives to create social value and customer value in thechemical and industrial products and diversified products business, as well as in the exploratory business.
Technology innovations will be an effort to enhance our strengths in amplifying such value. The Group’s
technology innovations will be driven by the three forms of “mastering”: “mastering rubber,” “mastering roadcontact,” and “mastering manufacturing.” We will drive R&D activities centered around these three forms of“mastering” and accelerate innovation by combining our strong “real” capabilities, such as technologies,
findings, and know-how on rubber and tires cultivated on-site, with “digital” leading to the development of“Dan-Totsu products” and “Dan-Totsu solutions.”
To promote these technology innovations, in 2022, we redeveloped our R&D base in Kodaira, Tokyo, and built
the “Bridgestone Innovation Park,” a global innovation hub. We are accelerating internal and external cocreation activities by utilizing the innovation center “B-Innovation” and the test course “B-Mobility,”transferring part of the head office functions for the Japan tire business to the Kodaira area in April 2023, andlaunching new initiatives under the R&B (Research and Business). Many partners have visited our innovation
park since its opening, resulting in the birth of various joint research and co-creation activities. We have also
been developing a corporate culture to value employees’ independence by introducing the Activity Based
Working (ABW) concept, which allows each employee to design their diverse work style to maximize theoutput of individual employees and their team. With Bridgestone Innovation Park at the core, the Group’s
innovation sites, “Digital Garage” in Europe and “Mobility Lab” in the U.S., will collaborate while drawing on
their respective strengths to focus on value creation.
In our premium tire business, we are working on the evolution of “ENLITEN,” the product design basetechnology for the Group’s premium tire business. We have positioned ENLITEN technology as a “newpremium” that creates unique value for the Bridgestone Group, and are working to establish and evolve thistechnology not only with the aim of improving the performance of conventional tires in all directions, but also
to realize “ultimate customization” to meet individual tire performance needs and provide added value for eachproduct, market, and customer. For example, “TURANZA EV,” the Group’s first EV tire released in North
America in 2023, was designed and developed after carefully listening to the tire needs of customers andretailers. To address the issue of premature wear, which has been a challenge for EV tires, we have improved
wear resistance by approximately 50% compared to conventional tires. In addition, in response to the growing
awareness toward sustainability, we have increased the ratio of recycled and renewable resources used in raw
materials for tires to 50%. In Japan, we launched “REGNO GR-X Ill” in February 2024, our first premium
brand product equipped with ENLITEN technology for passenger car replacement tires. REGNO GR-X Illoffers enhanced spatial quality and refined driving performance by improving on the basic performance requiredof tires, such as quietness, ride comfort, and driving performance, and also contains a higher ratio of recyclable
and renewable resources, contributing more to sustainability than conventional tires.
Going forward, we will evolve our ENLITEN technology in alignment with the reinforcement of our sustainableglobal motorsports activities. In 2023, we developed and supplied the first motorsports tires using ENLITEN
technology at the 2023 Bridgestone World Solar Challenge, a world-leading solar car race for which we are themain sponsor. In addition to increasing the ratio of recycled and renewable resources to 63%, roughly doublethat for the tires supplied for the previous race held in 2019, we also made significant improvements, such as
reducing the weight of the tires, a must for solar cars, and increasing durability to withstand the racing
environment of about 3,000 kilometers across Australia. We are also promoting various activities in Europe.
For example, we asked for feedback from customers who used our tires using ENLITEN technology at theBridgestone FIA ecoRally Cup, a rally event on public roads in which ordinary drivers participate in zeroemission vehicles, thereby gaining insight that will help in the planning of our next product. In addition, we
have been selected as the future sole tire supplier of the ABB FIA Formula E World Championship from the2026-2027 season, and as such we will continue to evolve our ENLITEN technology with a view to supplying
tires for this event. Through these global sustainable motorsports activities, we will use racing as a “mobilelaboratory” to refine technology in extreme conditions, evolving and connecting this innovation to thedevelopment of replacement tires for the future under the concept “From Circuit to Street.”48

We have also positioned our “MASTERCORE” technology, which is adopted in off-the-road tires for mining
vehicles, as a “new premium” alongside ENLITEN technology. MASTERCORE combines our proprietary newtechnologies including materials, structure, and manufacturing technologies such as in-house steel cords torealize outstanding durability performance. Going forward, we will continue our efforts to develop high-valueadded tires for mining vehicles.
Furthermore, Bridgestone Commonality Modularity Architecture (BCMA), the technology that supports“ultimate customization” leveraging ENLITEN technology, divides the tire into three modules in thedevelopment and production processes: the carcass, skeleton of the tire; the belt, which reinforces the tire; andthe tread, which makes up the tire surface. Module 1 (carcass) and Module 2 (belt) are shared among different
products to simplify the value chain from development to production and sales, whereas Module 3 (tread) isused to customize performance and differentiate products. We can improve productivity and optimize costs bystreamlining the number of products and sizes and the development and manufacturing processes. Furthermore,by sharing modules, tire production can be flexibly adapted to each region’s market environment and sales
strategies, thereby enabling the maximization of sales opportunities and the streamlining of inventory
management and distribution costs, including supporting the manufacturing operations of plants close to
demand areas. We will carry out such efforts to create positive effects across the entire value chain.
Moreover, to evolve manufacturing that can provide a sustainable and stable supply of premium tires, we will
systematically promote the shift to green and smart factories. In alignment with the promotion of BCMA, wewill strive to create social value and customer value by improving the productivity and efficiency ofdevelopment and manufacturing processes and reducing environmental impact across the entire value chain.
In the solutions business, our growth business, we are developing tire wear prediction solutions that utilize
digital technology to analyze the usage data of tires for trucks, buses, mining vehicles, and aircraft. In addition,
based on co-creation with customers, we are also taking on the challenge of evolving this into tire durability
prediction solutions that propose ways to use tires more safely, efficiently, and therefore longer, as well as how
to efficiently operate the vehicle by building Al-driven proprietary algorithms that combine tire-related datawith vehicle operation status data. For example, in truck and bus tire solutions, we are expanding our “Fleetcare”
service, which combines premium tires, tire maintenance, retreading, and online fleet management in an optimal
package that meets the individual needs of customers, from Europe to North America. In addition, we are
expanding individual management of tires across their lifecycle from new products to maintenance and retread
to the global market using Radio Frequency Identification (RFID), an automatic recognition technology thatenables contactless reading and writing of information using wireless communication. We are also developinga next-generation RFID system for tires that maximizes data communication performance through co-creation
with TOPPAN Edge Inc.
As for the solutions to off-the-road tires for mining vehicles, we have combined Bridgestone MASTERCORE,
our Dan-Totsu product, with digital tools to monitor vehicles and tires, as part of our efforts to develop mining
solutions that optimize mining operations.
Through co-creation with Tier IV, Inc., which provides solutions necessary for developing and operating safe
autonomous vehicles with peace of mind, we will also contribute to the evolution of mobility, such as in the
R&D and practical application of autonomous driving.
Turning to our sustainability efforts as an initiative to achieve a sustainable and stable supply of natural rubber,
improve their productivity, and diversify supply sources, we are creating technologies through co-creation withvarious partners. Specific initiatives include the development of an optimization system for para rubber tree
plantation that utilizes big data, efforts for stably increasing the productivity of natural rubber without
expanding the plantation area, working to achieve practical use of natural rubber derived from the guayule plant,
which can be grown in arid regions, with the aim of diversifying natural rubber sources, and developing atechnology to efficiently and stably increase guayule seedlings from high-quality seeds.
Based on co-creation, we also focus on promoting Digital Transformation (DX). We are also training and hiring
digital talent, including data scientists who can analyze and develop advanced AI and algorithms. Through awide range of exchanges in the digital field, including the launch of joint research on rubber simulation
fundamental technology at the “Bridgestone x Tohoku University Co-creation Lab” established on the Tohoku
University campus, we will foster digital talent and promote Bridgestone’s DX by deepening collaboration with49

new partners. In addition, the next-generation synchrotron radiation facility NanoTerasu is slated to commence
operations in 2024. We will accelerate the development of innovative materials by fusing various data andsimulations generated by this facility.
In addition, we are participating in an international space exploration mission with the Japan Aerospace
Exploration Agency (JAXA) and Toyota Motor Corporation, carrying the dreams of mankind as we take on thechallenge of the harsh environment of the moon’s surface. For this mission, we are conducting research anddevelopment on tires for use in manned lunar rovers.
In our chemical and industrial products and diversified products businesses and exploratory business, welaunched the “EVERTIRE INITIATIVE,” and have been advancing a joint project with ENEOS Corporation
for the social implementation of chemical recycling technologies for used tires. This project, supported by the“Green Innovation Fund” established by the Ministry of Economy, Trade and Industry, aims to contribute to theimprovement of resource recycling and carbon neutrality in the value chain of the tire and rubber, andpetrochemical industries through co-creation combining the knowledge and technological capabilities ofcompanies and academia. In June 2023, we installed test units at the Bridgestone Innovation Park to promote
the social implementation of chemical recycling technology that enables precise pyrolysis of used tires, andstarted an initiative to produce tire-derived oil and recovered carbon black through the pyrolysis of used tires.
In our soft-robotics business, we started a paid demonstration experiment on piece-picking (carrying out items
one by one) using a soft robot hand, and have been making proposals to the logistics, food, and factory
automation industries. We are also stepping up efforts to commercialize the soft-robotics business on a small
scale through co-creation with various partners, including capital and business alliances with startups. In
addition, we established “Softrobotics Ventures” in 2023, turning the soft-robotics business into an internal
venture. Through technology development and the exploration of commercialization, we will work to enhance
Talent creativity as a good example of demonstrating our entrepreneurship and creating a place where ourdiverse talent can shine.
R&D expenses for the Group as a whole for fiscal year 2023 totaled 122.0 billion yen.

(Note) Since some of the Group’s R&D activities are not tied to specific segments and the results of suchactivities may appear in multiple segments, the description of their status and amounts by segment havenot been included.

50

III. Facilities
1. Overview of capital expenditures
When considering capital investment, the Group carries out strategic investment activities while limiting
investees to a selected few with an eye towards maximizing return on capital investment. Based on this approach,for the fiscal year 2023, we focused on “laying foundation for future growth” even amid the tougher-thanexpected business environment, and carried out investments aimed at strengthening production to promote our
focus on premium areas and to build our IT infrastructure, etc. As a result, capital investment totaled 420.0
billion yen.
On a per-segment basis, the Group’s capital expenditures consisted of: Japan: 74.2 billion yen; China, AsiaPacific: 39.8 billion yen; the Americas: 182.9 billion yen; Europe, Russia, the Middle East, India and Africa:
73.3 billion yen; Others: 49.8 billion yen.

51

2. Major facilities(1) The Company(As of December 31, 2023)
Carrying amount (Yen in millions)
Name of business location

Location

Name of Description
Land
Buildings Machinery
segment of facilities(Area inandandthousands ofstructures vehicles
m2)

Kurume Plant

Kurume,FukuokaJapan

Production
facilities

8,433

3,609

Tokyo AC Tire Plant

Kodaira,
Tokyo

Japan

Production
facilities

1,719

1,135

Yokohama Plant

Totsuka-ku,
Yokohama

Japan

Production
facilities

10,454862

Nasu Plant

Nasushiobara,
Japan
Tochigi

Production
facilities

2,657

3,342

Hikone Plant

Hikone,
Shiga

Japan

Production
facilities

10,421

14,522

Shimonoseki Plant

Shimonoseki,Japan
Yamaguchi

Production
facilities

6,480

3,954

Tosu Plant

Tosu, SagaJapan

Production
facilities

2,303

5,232

Tochigi Plant

Nasushiobara,
Japan
Tochigi

Production
facilities

4,498

6,984

Kumamoto Plant

Tamana,KumamotoJapan

Production
facilities

2,192

2,688

Amagi Plant

Asakura,FukuokaJapan

Production
facilities

3,189

4,431

Hofu Plant

Hofu,
Yamaguchi

Japan

Production
facilities

5,911

6,881

Seki Plant

Seki, Gifu

Japan

Production
facilities

1,715

1,318

Saga Plant

Miyaki-gun,
Saga

Japan

Production
facilities

5,338

4,201

Kitakyushu Plant

WakamatsuKu,
Kitakyushu

Japan

Production
facilities

13,092

5,598

Technical Center

Kodaira,Tokyo

Corporate

Otherfacilities

36,456

10,875Chemical & Industrial
Products Technology
CenterTotsuka-ku,
Yokohama

Japan

Other
facilities

2,785

245

Headquarters and others

Chuo-ku,
Tokyo andothersCorporate

Otherfacilities

12,729

103

1,043
(457)
2,969
(243)
1,220
(195)
1,166
(658)
4,106
(285)
948
(182)
1,372
(151)
1,690
(142)
1,104
(388)
1,515
(482)
2,709
(150)
2,908
(236)
4,703
(374)
2,010
(3,008)-24,717
(250)

Other

Right-of-use
assets(Area inthousands of
m2)
56

1,238

(11)
0

148

(0)
3,298

472

(1)
886

788

(40)
933

2,214

(-)
78

1,630

(-)
9

1,278

(-)
3,218

1,057

(444)
359

439

(6)
8

933

(1)
319

1,861

(-)
339

80

(-)
17

438

(-)
10

1,056

(-)
4,498

8,756

(630)
1

167

(-)
5,787

960

(12)

Total

Number of
employees

14,379

984

3,002

195

18,054

461

8,893

734

29,257

1,421

16,248

748

9,769

734

17,129

854

7,367

590

9,666

891

16,488

941

6,161

225

12,903542

24,459511

62,595

2,724

3,198

472

44,296

1,079(2) Domestic subsidiaries(As of December 31, 2023)
Carrying amount (Yen in millions)Company nameLocation

Name of Description
Land
Buildings Machinery
segment of facilities(Area inandandthousands ofstructures vehicles
m2)

Other

BRIDGESTONE SPORTS
CO., LTD.

Chuo-ku,
Tokyo andothersJapan

Production
facilities
and others

512

317

1,839
(57)

189

BRIDGESTONE CYCLE
CO., LTD.

Ageo,
Saitama andothersJapan

Production
facilities
and others

1,895

444

1,720
(127)

123

52

Right-of-use
assets(Area inthousands of
m2)
1,141
(-)
1,093
(-)

Total

Number of
employees

3,999

315

5,276

568

(3) Overseas subsidiaries(China, Asia-Pacific)(As of December 31, 2023)
Carrying amount (Yen in millions)Company name(Name of business location)

Location

Name of Description
Land
Buildings Machinery
segment of facilities(Area inandandthousands ofstructures vehicles
m2)

BRIDGESTONE(TIANJIN) TIRE CO.,LTD.
(Tianjin Plant)

China

China,
AsiaPacific

Production
facilities

5,433

15,866–2,072

BRIDGESTONE (WUXI)TIRE CO., LTD.
(Wuxi Plant)

China

China,
AsiaPacific

Production
facilities

6,282

13,657–

2,598

THAI BRIDGESTONE
CO., LTD.
(Nong Khae Plant)

ThailandChina,
AsiaPacific

Production
facilities

6,608

6,769

BRIDGESTONE TIRE
MANUFACTURING(THAILAND) CO., LTD.
(Chonburi Plant)

ThailandChina,
AsiaPacific

Production
facilities

4,185

5,858

PT BRIDGESTONE TIRE
INDONESIA(Karawang Plant)

Indonesia

China,
AsiaPacific

Production
facilities

1,829

3,706

BRIDGESTONESPECIALTY TIRE
MANUFACTURING(THAILAND) CO., LTD.

ThailandJapan

Production
facilities
and others

11,984

5,118

53

3,210
(1,215)

3,502
(611)

166
(368)

4,663
(822)

Other

2,777

3,785

1,346

1,803

Right-of-use
assets(Area inthousands of
m2)
689
(249)

520
(286)

–

53
(-)

6
(-)

26
(-)

Total

Number of
employees

24,0601,365

23,056

1,319

19,3652,626

17,384

2,184

7,053

1,537

23,594742

(Americas)(As of December 31, 2023)
Carrying amount (Yen in millions)Company name(Name of business location)

Location

Name of Description
Land
Buildings Machinery
segment of facilities(Area inandandthousands ofstructures vehicles
m2)

BRIDGESTONEAMERICAS TIREOPERATIONS, LLC(Wilson Plant)

U.S.

Americas

Production
facilities

12,49031,659BRIDGESTONEAMERICAS TIREOPERATIONS, LLC(Warren Plant)

U.S.

Americas

Production
facilities

9,479

13,032

BRIDGESTONEAMERICAS TIREOPERATIONS, LLC(Aiken Plant)

U.S.

Americas

Production
facilities

19,40919,882

BRIDGESTONEAMERICAS TIREOPERATIONS, LLC(Aiken Off Road Plant)

U.S.

Americas

Production
facilities

37,908

12,171

BRIDGESTONECANADA INC.
(Joliette Plant)

CanadaAmericas

Production
facilities

10,14320,059BRIDGESTONE DE
MEXICO, S.A. DE C.V.
(Cuernavaca Plant)

MexicoAmericas

Production
facilities

10,422

18,827

BRIDGESTONE DO
BRASIL INDUSTRIA E
COMERCIO LTDA.
(Sao Paulo Plant)

BrazilAmericas

Production
facilities

3,917

13,053

BRIDGESTONE DO
BRASIL INDUSTRIA E
COMERCIO LTDA.
(BAHIA PLANT)

BrazilAmericas

Production
facilities

5,198

11,381

BRIDGESTONEAMERICAS TIREOPERATIONS, LLC(Technical Center)

U.S.

AmericasOtherfacilities

10,577

5,071

54

19
(1,803)569(3,662)

1,080(2,353)451(2,206)

8
(552)
4
(368)

96
(408)

16
(1,000)240(25,155)

Other

893

344

675

310

1,017

1,213

1,121

482

296

Right-of-use
assets(Area inthousands of
m2)
96
(-)

1,482
(-)

138
(-)

42
(-)

63
(-)
48
(-)

2,588
(-)

155
(-)

22
(-)

Total

Number of
employees

45,157

1,866

24,906

1,096

41,185

1,603

50,882542

31,2901,568

30,513

1,085

20,776

2,243

17,231840

16,207546

(Europe, Russia, Middle East, India and Africa)(As of December 31, 2023)
Carrying amount (Yen in millions)Company name(Name of business location)

BRIDGESTONEPOZNAN SP. Z O.O.
(Poznan Plant)

BRIDGESTONESTARGARD SP. Z O.O.
(Stargard Plant)

BRIDGESTONETATABANYA TERMELO
KFT.
(Tatabanya Plant)

BRIDGESTONEHISPANIAMANUFACTURING
S.L.U.
(Bilbao Plant)
BRIDGESTONEHISPANIAMANUFACTURING
S.L.U.
(Burgos Plant)

BRIDGESTONE INDIA
PRIVATE LTD.
(Pune Plant)

BRIDGESTONE EUROPE
NV/SA(Technical Center)

Location

Name of Description
Land
Buildings Machinery
segment of facilities(Area inandandthousands ofstructures vehicles
m2)

PolandEurope,Russia,MiddleProduction
East,facilities
India andAfrica21,711

16,792

PolandEurope,Russia,MiddleProduction
East,facilities
India andAfrica14,947

8,687

Hungary

Europe,Russia,MiddleProduction
East,facilities
India andAfrica12,033

10,229Spain

Europe,Russia,MiddleProduction
East,facilities
India andAfrica3,400

10,142

Spain

Europe,Russia,MiddleProduction
East,facilities
India andAfrica5,309

20,062

India

Europe,Russia,MiddleProduction
East,facilities
India andAfrica10,69813,784Italy

Europe,Russia,MiddleOther
East,facilities
India andAfrica

6,645

3,638

212
(35)

636
(1,000)

1,360
(659)

10
(150)

–
(301)

–

1,187
(1,749)

Other

2,390

1,030

2,175

1,703

2,727

1,557

297

Right-of-use
assets(Area inthousands of
m2)

1,532
(300)

426
(-)

193
(-)

269
(-)

2,183
(-)

3,132
(759)

148
(-)

Total

Number of
employees

42,637

1,910

25,726

1,024

25,9901,296

15,524834

30,281

1,439

29,171

1,906

11,915586(Notes) 1. The amounts are based on carrying amounts excluding construction in progress.
2. Land for the Company’s Tokyo AC Tire Plant is presented as part of the Technical Center because
their plots are not separated.
3. Land for the Company’s Technical Center includes 2,497,000 m2 of land, as well as 630,000 m2 ofland recorded as right-of-use assets, for test course sites under its management (located in Shibetsu,
Hokkaido and Nasushiobara, Tochigi).
4. Land for the Company’s Chemical & Industrial Products Technology Center is presented as part of
the Yokohama Plant because their plots are not separated.
5. Land for BRIDGESTONE AMERICAS TIRE OPERATIONS, LLC’s Technical Center includes
24,281,000 m2 of land for test course sites.
6. No major facilities are currently idle.
7. The transfer of the Russian business was completed in December 2023.
55

3. Plans for addition and retirement of facilities
Plans for addition and retirement of facilities in the next fiscal year (January 1, 2024 to December 31, 2024)
are as follows.
(1) Additions
The breakdown by segment is as follows.
Name of segment

Amount of planned capital
expenditures(Yen in millions)

Key descriptions and purposes of facilities, etc.
Investments aimed at strengthening production to promote

88,000focus on premium areas and to build our IT infrastructure,etc.

50,000The same as above

Americas189,000

The same as above

Europe, Middle East and Africa

54,000The same as above

Other

52,000The same as above

Total

433,000–

Japan
China, Asia-Pacific, India andChina(Notes) 1. The Company will change its segment classifications from 2024 in line with its efforts to further
strengthen its global management structure. The table above reflects the following changes.
Accompanying reclassification of the India business, the “China, Asia-Pacific” segment will bechanged to the “Asia-Pacific, India and China” segment, and the “Europe, Russia, Middle East, India
and Africa” segment will be changed to the “Europe, Middle East and Africa” segment.
2. The amount of planned capital expenditures in the Japan segment includes the amounts of planned
capital expenditures at tire plants in Japan that produce tires for other segments.
3. Funds required for the planned capital expenditures are scheduled to be covered by funds on hand,borrowings and leases.
(2) Retirements
There are no plans for the retirement or sale of significant facilities, except for the retirement or sale offacilities for recurring upgrades.

56

IV. Status of the Company
1. Shares of the Company(1) Total number of shares authorized, etc.
1)2)

Total number of shares authorizedClass

Total number of shares authorized to be issued (Shares)

Common stock

1,450,000,000

Total

1,450,000,000

Total number of shares issued

Class

Number of shares issued Number of shares issued
as of the end of the fiscal
as of the filing dateyear (Shares)(Shares)(December 31, 2023)(March 26, 2024)

Common stock

713,698,221

713,698,221

Total

713,698,221

713,698,221

57

Stock exchange on
which the Company islisted or authorized
financial instruments
business association towhich the Company isregistered
Tokyo Stock Exchange(Prime Market)
Fukuoka Stock
Exchange–

Details

Number of shares perunit: 100 shares–(2) Stock acquisition rights
1)

Stock option plans

Date of resolution

March 26, 2009

March 30, 2010

March 29, 2011

Classification and number of
eligible individuals

Members of the Board of theCompany: 9
Vice President-Officers notconcurrently serving as
members of the Board of theCompany: 20

Members of the Board of theCompany: 8
Vice President-Officers notconcurrently serving as
members of the Board of theCompany: 25

Members of the Board of theCompany: 9
Vice President-Officers notconcurrently serving as
members of the Board of theCompany: 36

77 units

152 units

480 units

Common stock
7,700 shares

Common stock
15,200 shares

Common stock
48,000 shares

Exercise price (Note 1)

1 yen

Same as left

Same as left

Exercise period(Note 1)
Issue price and amount ofcommon stock to be increased
when shares are issued upon
exercise of the stockacquisition rights (Note 1)
Exercise conditions(Note 1)

From May 1, 2009 to April 30,
2029

From May 6, 2010 to April 30,
2030

From May 2, 2011 to April 30,
2031

Number of stock acquisitionrights(Notes 1 and 2)
Type, details, and number ofshares underlying the stockacquisition rights(Notes 1 and 3)

Issue price:
1,265 yen Issue price:
1,401 yen Issue price:
1,657 yenAmount of common stock to
Amount of common stock to
Amount of common stock to
be increased:
633 yen be increased:
701 yen be increased:
829 yen(Note 4)Same as left

Same as left

Matters concerning transfer ofstock acquisition rights(Note 1)

Any acquisition of the stockacquisition rights throughtransfer must be approved by
the Company’s Board of
Directors. (Note 5)

Same as left

Same as left

Matters concerning granting ofstock acquisition rights in theevent of reorganization(Note 1)

–

–

58

–

Date of resolution

March 27, 2012

March 26, 2013

March 25, 2014

Classification and number of
eligible individuals

Members of the Board of theCompany: 9
Vice President-Officers notconcurrently serving as
members of the Board of theCompany: 35

Members of the Board of theCompany excluding outside
directors: 4
Vice President-Officers notconcurrently serving as
members of the Board of theCompany: 36

Members of the Board of theCompany excluding outside
directors: 4
Vice President-Officers notconcurrently serving as
members of the Board of theCompany: 46

723 units [680 units]

973 units [972 units]

841 units [813 units]

Common stock
72,300 shares [68,000 shares]

Common stock
97,300 shares [97,200 shares]

Common stock
84,100 shares [81,300 shares]

1 yen

Same as left

Same as left

From May 1, 2012 to April 30,
2032

From May 1, 2013 to April 30,
2033

From May 1, 2014 to April 30,
2034

Number of stock acquisitionrights(Notes 1 and 2)
Type, details, and number ofshares underlying the stockacquisition rights(Notes 1 and 3)
Exercise price(Note 1)
Exercise period(Note 1)
Issue price and amount ofcommon stock to be increased
when shares are issued upon
exercise of the stockacquisition rights (Note 1)
Exercise conditions(Note 1)

Issue price:
1,649 yen Issue price:
3,314 yen Issue price:
3,154 yenAmount of common stock to
Amount of common stock to
Amount of common stock to
be increased:
825 yen be increased:
1,657 yen be increased:
1,577 yen
(Note 4)Same as left

Same as left

Matters concerning transfer ofstock acquisition rights(Note 1)

Any acquisition of the stockacquisition rights throughtransfer must be approved by
the Company’s Board of
Directors. (Note 5)

Same as left

Same as left

Matters concerning granting ofstock acquisition rights in theevent of reorganization(Note 1)

–

–

59

–

Date of resolution

Classification and number of
eligible individuals

Number of stock acquisitionrights(Notes 1 and 2)
Type, details, and number ofshares underlying the stockacquisition rights(Notes 1 and 3)
Exercise price(Note 1)

Exercise period(Note 1)

Issue price and amount ofcommon stock to be increased
when shares are issued upon
exercise of the stockacquisition rights (Note 1)

March 24, 2015

April 21, 2016

April 27, 2017

Members of the Board of theCompany excluding outside
directors: 3
Vice President-Officers notconcurrently serving as
members of the Board of theCompany: 48

Members of the Board of theCompany excluding nonexecutive members of theBoard:
2
Executive officers of theCompany not concurrently
serving as members of theBoard: 8
Vice President-Officers of theCompany not concurrently
serving as executive officers:
41

Plan A
Members of the Board of theCompany excluding nonexecutive members of theBoard:
2
Executive officers of theCompany not concurrently
serving as members of theBoard: 5
Vice President-Officers of theCompany not concurrently
serving as executive officers:
45
Plan B
Executive officers of theCompany not concurrently
serving as members of theBoard: 1
Vice President-Officers of theCompany not concurrently
serving as executive officers:
2

1,013 units [994 units]

1,582 units [1,576 units]

Plan A 1,658 units
Plan B 71 units

Common stock
101,300 shares [99,400 shares]

Common stock
158,200 shares [157,600
shares]Common stock
Plan A 165,800 shares
Plan B 7,100 shares

1 yenSame as left

Same as left

Plan A
From May 13, 2017 to May
From May 1, 2015 to April 30, From May 7, 2016 to May 6,
12, 2037
2035
2036
Plan B
From July 6, 2017 to July 5,
2037
Plan A
Issue price:
3,578 yenAmount of common stock to
Issue price:
4,100 yen Issue price:
2,885 yen
be increased:
1,789 yenAmount of common stock to
Amount of common stock toPlan Bbe increased:
2,050 yen be increased:
1,443 yen
Issue price:
3,672 yenAmount of common stock to
be increased:
1,836 yen

Exercise conditions(Note 1)

(Note 4)Same as left

Same as left

Matters concerning transfer ofstock acquisition rights(Note 1)

Any acquisition of the stockacquisition rights throughtransfer must be approved by
the Company’s Board of
Directors. (Note 5)

Same as left

Same as left

Matters concerning granting ofstock acquisition rights in theevent of reorganization(Note 1)–––

(Notes) 1. The information is as of the end of the current fiscal year (December 31, 2023). As for the information that has changed
between the end of the current fiscal year and the last day of the month prior to the filing date (February 29, 2024),60

the information as of the last day of the month prior to the filing date is presented in brackets. For all other matters,
there has been no change in the information since the end of the current fiscal year.
2. The number of shares underlying each stock acquisition right is 100.
3. In case of the following events subsequent to the day of allotment, the number of shares to be granted shall be adjusted
accordingly.
(1) If the Company conducts a share split (including a gratis allotment of shares; hereinafter the same for share splits)
or share consolidation, the number of shares to be granted shall be adjusted in accordance with the following
formula, and the total number of shares underlying the stock acquisition rights shall be the number of shares tobe granted after adjustment multiplied by the total number of stock acquisition rights yet to be exercised or
acquired by the Company.
Number of shares to be granted after adjustment = Number of shares to be granted before adjustment × Ratioof share split or consolidation(Any fractions less than one share shall be rounded down when calculating the number of shares to be granted.)(2) In case of a compelling event that requires an adjustment to the number of shares to be granted, such as theCompany reducing its common stock or conducting a merger or company split, the number of shares to be granted
shall be adjusted to a reasonable extent, taking account of the factors such as the conditions of the reduction incommon stock, the merger or company split, and the total number of shares underlying the stock acquisition rights
shall be the number of shares to be granted after adjustment multiplied by the total number of stock acquisitionrights yet to be exercised or acquired by the Company. Any fractions less than one share shall be rounded downwhen calculating the number of shares to be granted.
4. (1) Even during the exercise period, a stock acquisition right holder may not exercise his/her stock acquisition rights
while he/she is holding a position of member of the Board, executive officer, or vice president-officer of theCompany (including the day on which he/she retires).
(2) Stock acquisition rights may not be exercised in part.
(3) Other exercise conditions are prescribed in the stock acquisition right allotment agreement executed between the
Company and the stock acquisition right holder.
5. Other details are prescribed in the subscription requirements and the stock acquisition right allotment agreement
executed between the Company and the stock acquisition right holder.

2)

Shareholder rights plans
No item to report.

3)

Other stock acquisition rights
No item to report.

(3) Exercises of moving strike convertible bonds
No item to report.
(4) Changes in the total number of shares issued, common stock and legal capital surplus

Date

January 21, 2020
(Note)

Increase(decrease) in
the total
number ofshares issued(Thousands ofshares)(47,838)

Total number
Increase
Increase
Balance ofof shares
Balance of(decrease) in(decrease) inlegal capitalissuedcommon stock
legal capitalcommon stock
surplus(Thousands of(Yen in millions)surplus(Yen in millions)(Yen in millions)shares)(Yen in millions)

713,698–(Note) The decreases are due to retirements of treasury stock.

61

126,354–

122,079

(5) Distribution of shares by shareholder category(As of December 31, 2023)
Status of shares (Number of shares per unit: 100 shares)
Category

Number ofshareholders
Number ofshare units

National
and local
governments

Financial
Financial instruments
institutions business
operators

Other
corporations

Foreign shareholders

Individuals
Other than
Individuals and others
individuals

Total

Number ofshares lessthan one unit
(shares)

–

226

45

1,051

953

218

97,733

100,226––

2,125,441

471,533

1,055,792

1,987,155

1,926

1,490,527

7,132,374

460,821

–

29.80

6.61

14.80

27.86

0.03

20.90

100.00–held
Ratio tototal shares(%)(Notes) 1. Treasury stock (29,044,171 shares) is included in “Individuals and others” (290,441 units) and “Number of shares lessthan one unit” (71 shares). All 29,044,171 shares of treasury stock were the shares effectively held as of December
31, 2023.
2. “Other corporations” and “Number of shares less than one unit” include 16 units and 20 shares registered in the nameof Japan Securities Depository Center, Inc., respectively.

62

(6) Major shareholders(As of December 31, 2023)
Ratio of the number of
Number ofshares held to the total
shares heldnumber of shares issued(Thousands(excluding treasury stock)of shares)
(%)

Name

Address

The Master Trust Bank of Japan,
Ltd. (Trust account)

2-11-3 Hamamatsucho, Minato-ku, Tokyo

105,671

15.43

Ishibashi Foundation

1-7-2 Kyobashi, Chuo-ku, Tokyo

76,693

11.20

Custody Bank of Japan, Ltd. (Trustaccount)

1-8-12 Harumi, Chuo-ku, Tokyo

38,923

5.69

Hiroshi Ishibashi

Minato-ku, Tokyo

21,0003.07

SMBC Nikko Securities Inc.

3-3-1 Marunouchi, Chiyoda-ku, Tokyo

16,934

2.47

Nagasaka Corporation

1-7-2 Kyobashi, Chuo-ku, Tokyo

16,325

2.38

Nippon Life Insurance Company

1-6-6 Marunouchi, Chiyoda-ku, Tokyo

13,218

1.93

STATE STREET BANK WEST
CLIENT - TREATY 505234(Standing proxy: Settlement &Clearing Services Department,
Mizuho Bank, Ltd.)

1776 HERITAGE DRIVE, NORTHQUINCY, MA 02171, U.S.A.
(2-15-1 Konan, Minato-ku, Tokyo)

11,7701.72

Japan Securities Finance Co., Ltd.

1-2-10 Nihonbashi Kayabacho, Chuo-ku,
Tokyo10,933

1.60

SSBTC CLIENT OMNIBUS
ACCOUNT(Standing proxy: Custody
Operations Department, Tokyo
Branch, The Hongkong andShanghai Banking Corporation
Limited)ONE CONGRESS STREET, SUITE 1,
BOSTON, MASSACHUSETTS(3-11-1, Nihombashi, Chuo-ku, Tokyo)

9,146

1.34

320,615

46.83

Total

–

(Notes) 1. Ishibashi Foundation is a public interest incorporated foundation, established for the purpose of contributing to thesound development of society through business that popularizes and improves fine arts as well as through donationand grants program that support artistic, cultural and educational activities.
2. Shares held by trust banks include shares owned in the trustees’ capacity.
3. The Company holds 29,044 thousand shares of treasury stock, which are not included in the table above.

63

(7) Voting rights
1)

Total number of shares issued(As of December 31, 2023)
Category

Number of voting rights(Units)Number of shares

Shares without voting rights
Shares with restricted voting rights(Treasury stock, etc.)
Shares with restricted voting rights(Other)

–

–

–

–

–

–

–

–

–

(Own holdings of treasury
stock)
Shares with full voting rights(Treasury stock, etc.)

Commonstock

Details–

29,044,100–(Cross-shareholdings)
Commonstock

Shares with full voting rights

Common(Other)stock–

10,000684,183,300

6,841,833–

460,821––

Total number of shares issued

713,698,221––

Total number of voting rights–

6,841,833–

Shares less than one unit

Commonstock(Note) The number of shares in the “Shares with full voting rights (Other)” field includes 1,600 shares registered in the name ofJapan Securities Depository Center, Inc. The number of voting rights includes 16 units of voting rights relating to shareswith full voting rights registered in the name of Japan Securities Depository Center, Inc.

2)

Treasury stock(As of December 31, 2023)
Number of
Ratio of the number
shares held
Total number of shares held to theunder theof shares held total number ofnames ofshares issued (%)
othersAddress

Number ofshares held
under own
name

Bridgestone Corporation

3-1-1 Kyobashi, Chuo-ku,
Tokyo

29,044,100–

29,044,100

4.07

Bridgestone Tire Nagano

2-18-20 Koyaminami,

Sales Co., Ltd.

Matsumoto City, Nagano

10,000–10,0000.00

29,054,100–

29,054,100

4.07

Name of shareholder

Total

–

64

2. Acquisition of treasury stock, etc.
[Class of stock] Acquisition of common stock pursuant to Article 155, items (vii) and (xiii) of the Companies
Act(1) Acquisition by resolution of the Shareholders’ Meeting
No item to report.
(2) Acquisition by resolution of the Board of Directors
No item to report.
(3) Items not based on resolution of the Shareholders’ Meeting or Board of Directors
Acquisition of common stock pursuant to Article 155, item (vii) of the Companies Act
Category

Number of shares

Treasury stock acquired in the current fiscal year

Total amount (Yen)

1,674

9,491,008

Treasury stock acquired during the period after the reporting312
1,918,416
period to the Filing Date
(Note) Treasury stock acquired during the period after the reporting period to the Filing Date does not include shares acquired
through demand for purchase of shares from shareholders holding less than one unit of shares between March 1, 2024
and the Filing Date of the Annual Securities Report.

Acquisition of common stock pursuant to Article 155, item (xiii) of the Companies Act
Category

Number of shares

Treasury stock acquired in the current fiscal year

1,410

Treasury stock acquired during the period after the reporting

Total amount (Yen)6,077,420

2,400
10,444,800
period to the Filing Date
(Note) This was an acquisition without contribution of some common stock allocated to the corporate executive manager andexecutive managers as restricted share-based remuneration.
Treasury stock acquired during the period after the reporting period to the Filing Date does not include shares acquired
through acquisition without contribution between March 1, 2024 and the Filing Date of the Annual Securities Report.

65

(4) Status of disposal and ownership of acquired treasury stock
The period after the reporting period to
the Filing Date
Total disposal amount Number of Total disposal amount(Yen)shares(Yen)

Current fiscal year
Category

Number ofsharesAcquired treasury stock that was offered tosubscribers

–

–

–

–

Acquired treasury stock that was cancelled

–

–

–

–

Acquired treasury stock that was transferred due tomerger, share exchange, share issuance and

–

–

–

–

(Through exercise of stock option)

125,400

584,627,067

9,700

45,222,734(Through granting of Performance Share Unit)

76,100354,785,049––(Through granting of Restricted Stock Unit, etc.)

19,60091,376,964––

83,360388,631,870

37,730175,902,165

191

890,464––

29,044,171–

28,999,453–

company split
Other(Through granting of restricted share-based
remuneration)(Sales due to demand for sales of shares fromshareholders holding less than one unit of shares)
Number of treasury stock held

(Note) The status of disposal and ownership of acquired treasury stock in the period after the reporting period to the Filing Datedoes not include treasury stock caused by the exercise of stock options between March 1, 2024 and the Filing Date of theAnnual Securities Report, and treasury stock from sales due to demand for sales of shares from shareholders holding lessthan one unit of shares.

663. Dividend policy
Regarding the interests of shareholders as an important management priority, the Company follows a basic
policy of strengthening our management base in preparation for future business developments while working
to improve business results. In regard to distributing profit to shareholders, the Company will prioritize therealization of sustainable growth and enhancement of corporate value mainly by strengthening earning power,
focusing on creating value, and conducting strategic growth investments in order to build a sustainable premium
brand, which will lead to maintaining an appropriate financial position and enhancing shareholder returns. In
determining dividend payments, the Company comprehensively evaluates factors including business results,financial positions for the relevant fiscal period, medium-term earnings forecasts, investment plans, and cash
flows. Based on these considerations, the Company strives to live up to the expectations of shareholders by
striving to achieve stable and continuous increases of dividend payments targeting a consolidated payout ratioof 40% by sustainably enhancing our corporate value.
The Company pays dividends of surplus twice a year, comprising year-end and interim dividends. Year-end
dividends are subject to a resolution of the Annual Shareholders’ Meeting, while interim dividends are subject
to a resolution of the Board of Directors. In addition, the Articles of Incorporation prescribe that the Company
may, by resolution of the Board of Directors, distribute interim dividends with the date of record for such
dividends being June 30 each year.
Based on the above policy, the dividend for the 105th Fiscal Period is set at an annual dividend of 200 yen per
share, comprising an interim dividend of 100 yen per share and a year-end dividend of 100 yen per share.
The appropriation of surplus through dividends relating to the current fiscal year is as follows.
Date of resolution

Total dividend amount (Yen in millions)

August 9, 2023:
Resolution of the Board of Directors

Dividend per share (Yen)

68,462

100

68,465

100

March 26, 2024:
Resolution of the Annual
Shareholders’ Meeting67

4. Status of corporate governance(1) Overview of corporate governance1)

Basic approach to corporate governance and implementation of measuresa. Basic approach to corporate governance
The Company considers the enhancement of corporate governance to be one of its most importantmanagement priorities. The Company believes that working to increase management quality and enhance thetransparency of decision-making is indispensable and, accordingly, continually strives to strengthen corporate
governance. This ensures that the Group continues to fulfill its founding mission as stated in the Bridgestone
Essence (corporate philosophy): “Serving Society with Superior Quality.”
Based on this approach, in accordance with the responsibility and authority delineated in the Administrative
Authority Rules, and in line with the Policy Management Rules, the Company is committed to developing,
communicating, and abiding by fair, transparent decision-making and management policies and governs the
behavior of the entire executive organization.
b. Overview of the corporate governance system
In March 2016, the Company transitioned to the “Company with Nominating Committee, etc.” model ofcorporate governance, and has subsequently made continuous efforts to strengthen its corporate governancesystem. As part of these efforts, the Company amended its Articles of Incorporation at the Annual Shareholders’Meeting held on March 26, 2021, abolishing the Chairman of the Board system in favor of a system in which
the chairperson of the Shareholders’ Meeting and the chairperson of the Board of Directors are each appointed
according to their respective roles.
These changes were made to continue enriching explanations on the Company’s management to its
shareholders by selecting the chairperson of the Shareholders’ Meeting from among representative executive
officers at a meeting of the Board of Directors, and to further enhance the function of overseeing execution byappointing the chairperson of the Board of Directors from among members of the Board (including outside
directors) at a meeting of the Board of Directors.
These amendments also expressly state in the Articles of Incorporation that the Board of Directors will appoint
the persons that convene the Shareholders’ Meeting and meetings of the Board of Directors.
At the Annual Shareholders’ Meeting held on March 26, 2024, 12 members of the Board (nine men and three
women) were elected, including eight outside directors (five men and three women). In accordance with theaforementioned amendments to the Articles of Incorporation, the chairperson of the Shareholders’ Meeting,the chairperson of the Board of Directors, and the persons that convene Shareholders’ Meeting and meetingsof the Board of Directors are appointed via resolution by the Board of Directors.
In addition, items related to decisions on basic management policies, important business execution matters,
and other matters that must be determined by the Board of Directors are stipulated in the Articles ofIncorporation, the Board of Directors’ Rules, and Administrative Authority Rules. These matters are
determined after careful deliberations by the Board of Directors.
The Company has established and maintains a corporate governance system that functions through theappropriate, active performance of duties by the Nominating Committee, the Audit Committee, and theCompensation Committee, in conjunction with oversight of the executive officers and members of the Boardby the Board of Directors. The Nominating Committee has four members, all of whom are outside directors.
This committee determines standards and policies for the fair and transparent appointment and dismissal ofmembers of the Board and makes appropriate proposals to the Board of Directors for the appointment anddismissal of the representative executive officers under a fair and transparent succession plan. The Audit
Committee has six members, consisting of four outside directors and two internal non-executive members of
the Board. This committee conducts audits regarding the business execution of executive officers and theexecution of duties of members of the Board. The two internal non-executive members of the Board has been
appointed as full-time members of the Audit Committee by the Audit Committee. The Compensation
68

Committee has four members, all of whom are outside directors. This committee deliberates on such mattersas the details of remuneration for members of the Board and executive officers.
In addition, to further increase the transparency of corporate governance, the Governance Committee and theCompliance Committee have been established as advisory committees to the Board of Directors. These
advisory committees to the Board of Directors deliberate on the corporate governance system and related
matters and on compliance activities as a whole and submit reports to the Board of Directors. Both advisorycommittees are each composed of all eight outside directors, and the internal non-executive members of theBoard, who are members of the Audit Committee, participate as observers.
The composition of the Board of Directors and each committee is as follows.
Name

Position

Board ofDirectors

Nominating
Committee

Compensation
Committee

Shuichi Ishibashi

Member of the Board(Executive Officer)*

○

–

–

–

–

–

○

–

–

–

–

–

Masahiro Higashi

Member of the Board(Executive Officer)

Audit
Governance Compliance
Committee Committee Committee

Scott Trevor Davis

Outside Director

◎

○

○

–

◎

○

Yuri Okina

Outside Director

○

○

◎

–

○

○

Kenichi Masuda

Outside Director

○

◎

○

–

○

◎

Kenzo Yamamoto

Outside Director

○

○

○

–

○

○

Yojiro Shiba

Outside Director

○

–

–

◎

○

○

Yoko Suzuki

Outside Director

○

–

–

○

○

○

Yukari Kobayashi

Outside Director

○

–

–

○

○

○

Yasuhiro Nakajima

Outside Director

○

–

–

○

○

○

○

–

–

○

–

–

○

–

–

○

–

–

Member of the Board
Akira Matsuda

Tsuyoshi Yoshimi(Non-executive
Officer)Member of the Board(Non-executive
Officer)

As of March 26, 2024
(Note) 〇 indicates a member, ◎ indicates the chairperson of the body (the chairperson of the Board of Directors or thechairperson of the committee).
* indicates the chairperson of the Shareholders’ Meeting.

69

The following indicates attendance at meetings of the Board of Directors of members of the Board andstatutory committees during the current fiscal year (January 1, 2023 to December 31, 2023) as of March 26,
2024.
Name
Shuichi Ishibashi
Masahiro Higashi

Board of Directors

Nominating Committee

Compensation
Committee

Audit Committee

–

–

–

–

–

–

15 of 15
(100%)
15 of 15
(100%)

Scott Trevor Davis

15 of 15
(100%)

18 of 18
(100%)

15 of 15
(100%)–

Yuri Okina

15 of 15
(100%)

18 of 18
(100%)

15 of 15
(100%)–

15 of 15

18 of 18

15 of 15

(100%)(100%)(100%)––

Kenichi Masuda
Kenzo Yamamoto

15 of 15
(100%)–
19 of 19
(100%)

Yojiro Shiba

15 of 15
(100%)––

19 of 19
(100%)

Yoko Suzuki

15 of 15
(100%)––

19 of 19
(100%)––

Yukari Kobayashi
Yasuhiro Nakajima

11 of 11
(100%)
11 of 11–

(100%)–

14 of 14
(100%)
14 of 14
(100%)

Akira Matsuda

11 of 11
(100%)––

14 of 14
(100%)

Tsuyoshi Yoshimi

15 of 15
(100%)––

19 of 19
(100%)(Note) Ms. Yukari Kobayashi, Mr. Yasuhiro Nakajima, and Mr. Akira Matsuda’s attendance differs from othermembers of the Board as they were newly elected as members of the Board at the 104th Annual
Shareholders’ Meeting held on March 28, 2023, and were also appointed as members of the Audit
Committee on the same date.

Matters considered at the Board of Directors and statutory and advisory committees are as follows:

Board of Directors
During the current fiscal year, the Board of Directors confirmed the progress of the Mid Term Business
Plan (2021-2023) and the status of formulating the Mid Term Business Plan (2024-2026), centered onreports from the Global CEO and Representative Executive Officer regarding discussions at the Global
Executive Committee (hereinafter “Global EXCO”), toward achieving the Mid-Long Term Business
Strategy decided at the Board of Directors meeting in April 2020. At the same time, the Board of Directors
set themes based on proposals from outside directors, and engaged in discussions with particular emphasis
placed on sustainability initiatives, IP strategy, technology strategy, and investment in human capital. In
addition, the Board of Directors supervises execution and makes necessary decisions particularly throughdeliberations on quarterly financial results and individual matters.

<Statutory Committees>

Nominating Committee
While exchanging opinions on management strategies with executive officers in Japan and abroad,including the Global CEO, and with persons in charge of each business, the Committee deliberated on the70Board succession planning and proposals related to the election of representative executive officers, anddecided on proposals for the election of members of the Board to be submitted to the Annual Shareholders’Meeting, upon holding discussions on Board member composition including consideration of new
nominees for members of the Board.
Audit Committee
As described in “4 (3) 1) Audit by the Audit Committee.”

Compensation Committee
As described in “4 (4) 1) d. Activities of the Compensation Committee.”<Advisory Committees>

Governance Committee
The Committee deliberates on the evaluation results of the effectiveness of the Board of Directors’
functions and given matters, and makes recommendations to the Board of Directors, thereby leading to thecontinuous improvement of corporate governance. The Committee also evaluates the Company’s efforts
to improve its governance system and proposes to enhance its effectiveness. Specifically, it deliberates on
the contents of the “Report on the Corporate Governance Code,” which explains the Company’s initiatives
and views on all the principles of the Corporate Governance Code, and reports its findings to the Board of
Directors.

Compliance Committee
The Committee oversees compliance-related systems and activities by receiving reports on, and discussing
compliance activities in the Group, the penetration status of the Bridgestone Code of Conduct in the Groupon a global basis, and the operation status of the BridgeLine, a whistleblowing system.

As for the business divisions from January 2024, under the Global CEO, the Group’s business has been divided
into two regions, BRIDGESTONE WEST (mainly in the U.S. and Europe) and BRIDGESTONE EAST
(mainly in Japan and Asia), each headed by a Joint Global COO. Under the two regions, several SBUs havebeen established, which have been broken down into detailed business areas to allow management andexecution to be more closely involved in the field and to go deeper into issues. Furthermore, in order to ensure
consistency between global and regional strategies and maximize effectiveness and efficiency, the Company
has established a global integration function and has appointed a Global CAO (Chief Administration Officer),a Global CDXO (Chief Digital Transformation Officer), and a Global CTO (Chief Technology Officer), among
others.
The Global EXCO, consisting mainly of these members, has been established as the Group’s highest level
management and execution committee to discuss and deliberate management strategies and issues (including
sustainability) from a global perspective, thereby strengthening the Group’s checks and balances function andimproving transparency in the decision-making process. (Global EXCO Members are described in thefollowing table.)
In addition, each operating division involved in business execution maintains a system for reporting to theappropriate representative executive officers of said divisions regarding the status of execution of duties. This
information is also regularly and promptly reported to the Board of Directors in order to aid in theirdeliberations, and these actions ensure that the Group maintains an effective supervisory function.

71

Name
Shuichi Ishibashi
Masahiro Higashi

Position
Global CEO (Representative Executive Officer)
Joint Global COO･BRIDGESTONE EAST CEO (Representative Executive Officer)
Global CAO
Joint Global COO･BRIDGESTONE WEST CEO (Executive Officer)

Paolo Ferrari

Global CDXOBSAM Group President

Masato Banno

Global CTO (Senior Vice President and Executive Officer)

Scott Damon

BRIDGESTONE WEST BMS Group President (Vice President and Senior Officer)

Laurent Dartoux

BSEMEA Group President (Vice President and Senior Officer)

Emilio Tiberio

BRIDGESTONE WEST CTO (Vice President and Senior Officer)

Craig Schneider

BRIDGESTONE WEST Retail Group President (Vice President and Senior Officer)

Christopher Nicastro

BSAM CLO, CCPO and Executive Vice President, Legal Affairs (Vice President andSenior Officer)

Nobuyuki Tamura

G-MICA (Vice President and Senior Officer)

Yasuhiro Morita

BSAPIC Group President (Vice President and Senior Officer)

Toshihiko Komami

Global COEA (Lead Expert, Global Strategy)
As of March 26, 2024

(Note) Meanings of abbreviations are as follows.
CAO: Chief Administration Officer
CDXO: Chief Digital Transformation Officer
CTO: Chief Technology Officer
CLO: Chief Legal Officer
CCPO: Chief Compliance Officer
COEA: Chief of External Affairsc. Reasons for adopting current corporate governance system
Under the corporate mission, the Group has set forth a vision that states, “Toward 2050, Bridgestone continues
to provide social value and customer value as a sustainable solutions company.” Thus, building an optimal
corporate governance system is a top priority, and we believe that continually improving the quality ofmanagement and ensuring transparency in decision-making are absolutely essential. As part of thisenhancement of the governance system, the Company has adopted the current system to both further
strengthen internal controls and evolve into a sustainable solutions company capable of proactively addressing
the changing business environment.

72

The following chart provides an overview of the Company’s corporate governance system.

As of March 26, 2024

d. Status of the development and implementation of internal control systems
At the Company’s Board of Directors’ meeting held on December 20, 2021, the following policies wereresolved regarding the development of internal control systems required pursuant to the provisions of Article
416, paragraph (1), items (i) (b) and (e) of the Companies Act.
1. Fundamental principles for the development of the Company’s internal control systems
Under the corporate mission of “Serving Society with Superior Quality,” the Company has set its visionin 2020 as: “Toward 2050, Bridgestone continues to provide social value and customer value as asustainable solutions company,” and has been engaged in management to realize the vision since.
As part of the initiatives undertaken, segregation between oversight and execution of the duties, oversightby the Board of Directors, and appropriate and more efficient business operations are all regarded as thefundamental principles that the Company should consider in the refinement of its internal control systems.
With the understanding of the above, the Company’s Board of Directors determines policies fordevelopment and implementation of internal control systems.
In order to further strengthen internal controls, evolve into a sustainable solutions company to be able toproactively address the changing business environment, and continue to implement the ever more
effective and efficient planning and execution of our business activities in accordance with the policies
on the development of the internal control systems, the Company’s Board of Directors delegates thedevelopment and implementation of internal control systems that are in line with the set policies to theRepresentative Executive Officers and oversee the implementation work.
2. Matters that are necessary in the execution of duties by the Audit Committee(1) In order to assist the work of the Audit Committee, the Company appoints an Executive Director
dedicated to audit, and under the Executive Director, establishes a department dedicated to assist
the Audit Committee with their duties.
Decisions on the selection and replacement of the Executive Director dedicated to audit are madebased on prior consultations with and consent of the Audit Committee. The same applies when the
Audit Committee requests replacement of the Executive Director.
73

The performance assessment of the Executive Director dedicated to audit takes the performance
evaluations conducted by the Audit Committee into consideration.
(2) A person designated by the Audit Committee is required to report on matters predetermined by the
Audit Committee periodically or without delay.
The Company prohibits unfavorable treatment of Members of the Board, Executive Officers, Vice
President-Senior Officers, and employees of the Company, and the Members of the Board,
Corporate Auditors, Corporate Officers, and employees of subsidiaries for reporting matters to the
Audit Committee.
(3) All the expenses associated with the execution of duties by the Audit Committee are fullycompensated.
(4) In order to ensure an effective audit by the Audit Committee, opportunities are created for Membersof the Audit Committee to gain an understanding of the flow of important decision-making practices
in the Company and the status of business operations.
3. Systems to ensure that the execution of duties by Executive Officers complies with relevant laws andregulations and the Articles of Incorporation, and matters that are necessary for the appropriate executionof business operations by the Company and the corporate group consisting of the Company and its
subsidiaries.
(1) Information concerning execution of duties by Executive Officers is documented without delay andadequately retained. Any significant information related to the execution of business is reported to
the Board of Directors without delay.
(2) A risk management system is developed and implemented to manage risks of incurring losses.
(3) In order to ensure the efficient execution of duties by Executive Officers, under the appropriatedelegation of authority from the Board of Directors to the Representative Executive Officer, internal
policies are maintained, and appropriate authorities required for the execution of duties arereallocated.
(4) In order to ensure that execution of duties by the Executive Officers, Vice President-Senior Officers,
and employees complies with relevant laws and regulations and the Articles of Incorporation,systems for J-SOX Act compliance are developed and implemented in accordance with “System
for Ensuring Appropriateness of Statements on Finance and Accounting and Other information,”set forth in Article 24-4-4 of the Financial Instruments and Exchange Act of Japan (the so-called“J-SOX Act”).
(5) In order to ensure proper execution of business operations at subsidiaries, policies arecommunicated across the Group; authorities are appropriately reallocated; a reporting frameworkfor subsidiaries to report their execution of business to the Company is developed and implemented;
and audits are conducted globally.
Risk management systems, compliance systems, systems against organized crime and other violent
groups, and systems for J-SOX Act compliance are developed and implemented within eachsubsidiary.
2)

Overview of agreement limiting damage compensation liability

The Company has entered into agreements with Members of the Board (excluding persons who are Executive
Members of the Board, etc.) that limits his/her damage compensation liability of Article 423, paragraph (1) of
the Companies Act, pursuant to Article 25, paragraph (2) of the Articles of Incorporation of the Company
based on the provision in Article 427, paragraph (1) of the Companies Act. The maximum amount of his/her
liability based on said agreement shall be the higher of either 10 million yen or the minimum liability amountprescribed in Article 425, paragraph (1) of the Companies Act.

74

3)

Overview of directors and officers liability insurance agreement with directors and officers as insureds

The Company has entered into a directors and officers liability insurance agreement provided for in Article
430-3, paragraph (1) of the Companies Act with an insurance company, insuring Members of the Board,
Executive Officers, and Vice President-Senior Officers to cover any liability or dispute resolution costs that
may result from claims for damages related to the performance of their duties. However, certain exclusions
apply, including for damages arising from actions taken with the knowledge that they violate laws or
regulations. The insurance premiums are fully borne by the Company.

4)

Number of Members of the Board

The Articles of Incorporation state that the number of Members of the Board of the Company shall be notmore than 15.
5)

Requirements for election of Members of the Board

The Articles of Incorporation state that the resolution for election of Members of the Board shall be made withshareholders present at a meeting who hold shares representing one-third (1/3) or more of the voting rights ofshareholders who are entitled to exercise voting rights, by a majority of the voting rights of the attending
shareholders.

6)

Matters to be resolved at the Shareholders’ Meeting that can be resolved by the Board of Directors

The Articles of Incorporation state that the following matters can be resolved by the Board of Directors without
resolution of the Shareholders’ Meeting.
• The ability to purchase treasury stock(To enable a flexible response)• The ability to exempt Members of the Board from liability(To enable the full demonstration of capabilities expected in their roles)• The ability to exempt Executive Officers from liability(To enable the full demonstration of capabilities expected in their roles)• The ability to distribute interim dividends(To provide stable return of profits to shareholders)
The additional rule in the Articles of Incorporation states that the Company may exempt the liability of any
person who served as a Corporate Auditor prior to the transition to a Company with Nominating Committee,
etc.
7)Special resolution requirements for Shareholders’ Meetings

For the smooth operation of the Shareholders’ Meetings, the Articles of Incorporation state that with respect
to special resolution requirements for Shareholders’ Meetings set forth in Article 309, paragraph (2) of theCompanies Act, resolutions may be adopted on the condition that shareholders holding at least one-third (1/3)
of the voting rights granted to all shareholders are present at the meeting and that a majority of at least twothirds (2/3) of those voting rights is obtained.

75

(2) Members of the Board and Executive Officers
1)

List of Members of the Board and Executive Officers

Members of the Board and Executive Officers include 11 males and 3 females. (Percentage of female Membersof the Board and Executive Officers: 21.4%)
a. Members of the Board
Position

Name

Date of birth

Personal history
April 1977

Member of the Board

Shuichi Ishibashi

January 19, 1954

June 2003
January 2005
July 2012
January 2014
January 2016
March 2016
January 2019
March 2020

April 1985
January 2013

October 2013
March 2017
January 2019
January 2020
July 2020
Member of the Board

Masahiro Higashi

February 11, 1961
March 2021

September
2021
May 2022
January 2024

April 1990

April 2001
Member of the Board
Note 1

Scott Trevor
Davis

December 26, 1960 April 2006

March 2011

76

Term
Number ofofshares held
officeJoined Bridgestone Tire Co., Ltd.
(currently Bridgestone Corporation)
Director, Consumer Tires Business
Vice President and Officer
Vice President and Senior Officer
Senior Vice President
Note
Executive Vice President
2
Executive Vice President and Executive
Officer
Vice Chair and Representative Executive
OfficerMember of the Board and Representative
Executive Officer and Global CEO(present)
Joined Bridgestone Corporation
Director, Global Customer and Market
Research Division and Director,
Advanced Business Planning Division
Vice President and Officer
Vice President and Senior Officer
Senior Vice President and Executive
Officer
Vice Chair and Representative Executive
Officer
Representative Executive Officer, Global
Note
COO, and Global CAO
2Member of the Board, Representative
Executive Officer, Global COO andGlobal CAO
Member of the Board, Representative
Executive Officer and Global COO
Member of the Board, Representative
Executive Officer and Joint Global COO
Member of the Board, Representative
Executive Officer, Joint Global COO･
BRIDGESTONE EAST CEO and Global
CAO (present)
Researcher, The Japan Institute ofLabour (currently The Japan Institute forLabour Policy and Training)
Professor, Department of International
Economics, Reitaku University
Note
Professor, Department of Global
2
Business, College of Business, Rikkyo
University (present)
Member of the Board as Outside
Director, Bridgestone Corporation(present)

33,00025,3001,000

Position

Name

Date of birth

Personal history
April 1984
April 1992
April 1994
April 2000

Member of the Board
Note 1

Yuri Okina

March 25, 1960

June 2006
March 2014

June 2014
April 2018
April 1988
January 1997
Member of the Board
Note 1

Kenichi Masuda

January 11, 1963

March 2011
March 2016

April 1976
December
2003
July 2005

July 2006
Member of the Board
Note 1

Kenzo Yamamoto

January 21, 1954
May 2008
June 2012
March 2016

June 2018
April 1974
March 2003
May 2005
April 2009
Member of the Board
Note 1

Yojiro Shiba

August 7, 1950
June 2013
June 2015
March 2018

April 2019

77

Term
Number ofofshares held
officeJoined Bank of Japan
Joined The Japan Research Institute,
LimitedSenior Researcher, The Japan ResearchInstitute, Limited
Chief Researcher, The Japan ResearchInstitute, LimitedCounselor, The Japan Research Institute, Note
Limited2
Member of the Board as Outside
Director, Bridgestone Corporation(present)
Vice Chairman of the Institute, The
Japan Research Institute, Limited
Chairperson of the Institute, The Japan
Research Institute, Limited (present)
Attorney-at-law (present)
Partner, Anderson Mori (Japanese law
firm: currently Anderson Mori &Tomotsune) (present)
Note
Outside Corporate Auditor, Bridgestone2
Corporation
Member of the Board as Outside
Director, Bridgestone Corporation(present)
Joined Bank of Japan
General Manager for the Americas andChief Representative in New York, Bankof Japan
Director-General, Payment andSettlement Systems Department, Bank ofJapan
Director-General, Financial System andBank Examination Department, Bank of NoteJapan
2
Executive Director, Bank of Japan
Chairman, NTT Data Institute ofManagement Consulting, Inc.
Member of the Board as Outside
Director, Bridgestone Corporation(present)
Representative, Office KY Initiative(present)
Joined The Industrial Bank of Japan,
Limited (currently Mizuho Bank, Ltd.)Managing Executive Officer, Mizuho
Bank, Ltd.
Executive Officer, Oriental Land Co.,
Ltd.
Representative Director and Executive
Vice President Officer, Oriental Land
NoteCo., Ltd.
2
External Director, AMUSE INC.
Director and Vice Chairman, AMUSE
INC.
Member of the Board as Outside
Director, Bridgestone Corporation(present)
Representative Director and President,
AMUSE INC.

–

–

3,000

–

Position

Member of the Board
Note 1

Member of the Board
Note 1Name

Yoko Suzuki

Yukari Kobayashi

Member of the Board

Yasuhiro

Note 1

Nakajima

Date of birth

Personal history
April 1998

Attorney-at-law (present)

April 1998

Joined Takagi Godo Law OfficeNovember
September 21, 1970 2002
March 2018

April 17, 1963

October 13, 1961

78

Term
Number ofofshares held
officePartner, Suzuki Sogo Law OfficeNote(present)
2
Member of the Board as Outside
Director, Bridgestone Corporation(present)
April 1987
Joined IBM Japan, Ltd.
July 2002
Senior Manager, Overall Management of
System Products Marketing, IBM Japan,
Ltd.
January 2007 Director in charge of Public Sector,
Global Business Service, IBM Japan,
Ltd.
January 2007 Executive Officer, IBM Business
Consulting Services KK
March 2016
Growth Leader for Mercer Far East
Zone; Chief of Staff, Mercer Japan Ltd.
January 2018 Director, Mercer Investment Solutions
Ltd.
Note
2
February 2018 Chief Operating Officer, Mercer Japan
Ltd.
September
Corporate Officer; Corporate Strategy
2018Management Lead, Area Transformation
Lead, and Chief of Staff, Microsoft Japan
Co., Ltd.
March 2020
Representative Partner, Amanda Life
Consulting LLC (present)
March 2023
Member of the Board as Outside
Director, Bridgestone Corporation(present)
June 2023
Representative Member, JC1 LLC.
(present)
April 1984
Joined Hitachi, Ltd.
March 1995
Certified Public Accountant (present)
July 2007
Representative Partner,
PricewaterhouseCoopers Aarata(currently PricewaterhouseCoopers
Japan LLC)
July 2012
Executive Officer (Leader of Quality
Management), PricewaterhouseCoopers
AarataNote
July 2014
General Manager, Nagoya Office,2
PricewaterhouseCoopers Aarata LLC
July 2017
Oversight Board Member,PricewaterhouseCoopers Aarata LLC
July 2022
Representative, Nakajima CPA Office(present)
March 2023
Member of the Board as Outside
Director, Bridgestone Corporation(present)

3,600

100

100

Position

Name

Date of birth

Personal history
April 1987
September
1989

January 2011

Member of the Board

Akira Matsuda

January 16, 1963

March 2014
January 2017
January 2019

January 2022

March 2023
April 1988
January 2010

Member of the Board

Tsuyoshi Yoshimi

May 26, 1964

September
2012
October 2013
March 2017
March 2019

Term
Number ofofshares held
officeJoined Bridgestone Corporation
Seconded to
BRIDGESTONE/FIRESTONE INC.
(currently BRIDGESTONEAMERICAS, INC.) (USA)
Director, eco-Activities Promotion
Division, Bridgestone Corporation
Vice President and Officer, Environment
Note
Vice President and Senior Officer,
2
Responsible for Global Innovation
Vice President and Senior Officer;
CQMO, Responsible for Quality
Management
Lead Expert; CQMO; Assistant to
Executive Vice President, Responsible
for Quality Management
Member of the Board (present)
Joined Bridgestone Corporation
Seconded to BRIDGESTONE ASIA
PACIFIC PTE. LTD. (Singapore)
Seconded to BRIDGESTONE (CHINA)Note
INVESTMENT CO., LTD. (Shanghai)
2
Director, Finance Division, Bridgestone
Corporation
Vice President and Officer, Auditing
Member of the Board (present)

Total

3,800

3,100

73,000(Notes) 1. Of the Members of the Board, Mr. Scott Trevor Davis, Ms. Yuri Okina, Mr. Kenichi Masuda, Mr. Kenzo Yamamoto,
Mr. Yojiro Shiba, Ms. Yoko Suzuki, Ms. Yukari Kobayashi and Mr. Yasuhiro Nakajima are outside directors.
2. The terms of office of Members of the Board shall expire at the close of the Annual Shareholders’ Meeting relating to
the last business year that ends within one year after their election at the Annual Shareholders’ Meeting held on March
26, 2024.
3. The Company is a Company with Nominating Committee, etc. The structure of committees is described in “4 (1)Overview of corporate governance.”
4. Meanings of abbreviations are as follows.
CAO: Chief Administration Officer
CQMO: Chief Quality Management Officer

b. Executive Officers
Position

Name

Date of birth

Personal history
April 1977

Representative Executive Officer
Global CEO

Shuichi Ishibashi

January 19, 1954

June 2003
January 2005
July 2012
January 2014
January 2016
March 2016
January 2019
March 2020

79

Term
Number ofofshares held
officeJoined Bridgestone Tire Co., Ltd.
(currently Bridgestone Corporation)
Director, Consumer Tires Business
Vice President and Officer
Vice President and Senior Officer
Senior Vice President
Note
Executive Vice President
1
Executive Vice President andExecutive Officer
Vice Chair and Representative
Executive Officer
Member of the Board, Representative
Executive Officer and Global CEO(present)

33,000Position

Name

Date of birth

Personal history
April 1985
January 2013

October 2013
March 2017
January 2019
Representative Executive Officer
Joint Global COO･BRIDGESTONE
EAST CEO, Global CAO and BSAPIC
Chair
Chairman and Representative Board
Member, BRIDGESTONE TIRE
SOLUTION JAPAN CO., LTD.

January 2020
July 2020
Masahiro Higashi

February 11, 1961

March 2021

September
2021
May 2022

January 2024

September
2016

Executive Officer
Joint Global COO･BRIDGESTONEWEST CEO, Global CDXO, BSAM
Executive Chair of the Board, Group
President and BSEMEA Supervisory
Board Chair

January 2017
January 2018
Paolo Ferrari

April 10, 1970
January 2019
May 2022
January 2024

April 1986
July 2016
Senior Vice President and Executive
Officer
Global CTO･Monozukuri

Masato Banno

September 18, 1963 January 2017
January 2018
January 2019

Total

Term
Number ofofshares held
officeJoined Bridgestone Corporation
Director, Global Customer and Market
Research Division and Director,
Advanced Business Planning Division
Vice President and Officer
Vice President and Senior Officer
Senior Vice President and Executive
Officer
Vice Chair and Representative
Executive Officer
Representative Executive Officer,
Note
Global COO, and Global CAO
1Member of the Board, Representative
Executive Officer, Global COO andGlobal CAO
Member of the Board, Representative
Executive Officer and Global COO
Member of the Board, Representative
Executive Officer and Joint Global
COO
Member of the Board, Representative
Executive Officer, Joint Global COO･
BRIDGESTONE EAST CEO andGlobal CAO (present)
Joined BRIDGESTONE EUROPE
NV/SA
Members of the Board, President andCEO
Vice President and Senior Officer,
Bridgestone Corporation
Senior Vice President and Executive
Note
Officer
1
Executive Vice President andExecutive Officer
Executive Officer and Joint Global
COO
Executive Officer, Joint Global COO･
BRIDGESTONE WEST CEO andGlobal CDXO (present)
Joined Bridgestone Corporation
Director, Tire Development Division
No. 3
Note
Vice President and Officer
1
Vice President and Senior Officer
Executive Officer and Senior Vice
President (present)

25,30013,50012,40084,200(Notes) 1. The terms of office of Executive Officers shall expire at the close of the first meeting of the Board of Directors
convened after the close of the Annual Shareholders’ Meeting relating to the last business year that ends within one
year after their election.
2. Meanings of abbreviations are as follows.
CAO: Chief Administration Officer
CDXO: Chief Digital Transformation Officer
CTO: Chief Technology Officer

80

2)

Outside Directors and Outside Corporate Auditors

The Company has elected eight outside directors (as of March 26, 2024).
The Company believes that outside directors contribute to the strengthening of corporate governance,
including maintaining appropriate decision-making at meetings of the Board of Directors. To that end, theoutside directors provide independent opinions concerning deliberations, etc. on proposals at the Board of
Directors that reflect their wealth of experience and expertise, which are based on their diverse backgrounds
and fields of specialization.
To ensure the appropriate composition of the Board of Directors, the nominees for the Company’s outside
directors are determined through strict appointment procedures at the Company’s Nominating Committee inaccordance with the “Nominating Policy for Appointment to the Board” (described at the end) prescribed by
the Company’s Nominating Committee, and the reasons for appointment are as follows.
Name
Scott Trevor Davis

Main occupation

Reasons for appointment

Professor, Department of Global
Business, College of Business, Rikkyo
University

Mr. Scott Trevor Davis has excellent academic
knowledge in the field of sociology and international
business administration, as well as abundant wisdom
regarding sustainability and ESG in Japan and overseas.
Since his appointment as Outside Director of theCompany, he has been contributing to ensuring
appropriate decision making of the Board of Directors,
including from the perspectives of governance,compliance, and organizational and personnel strategy.
Based on his extensive experience as an Outside Directorof the Company, he has been playing a leading andextremely vital role since 2021 as the Company’s first
Independent Outside Director serving as Chairperson of
the Board of Directors in setting appropriate agenda
items and further enhancing deliberations, etc. In
addition, he participates in active deliberations as amember of the Nominating Committee and a member of
the Compensation Committee, and plays a leading role as
Chairperson of the Governance Committee in thediscussion to further enhance the Company’s governanceframework, including the effectiveness of the Board of
Directors.
He also contributes significantly as Chairperson of theBoard of Directors to conduct more efficient andeffective management of the Board of Directors thatmeets stakeholders’ expectations by actively participating
in dialogue with investors and analysts, etc.
The Company is required to further establish andpromote a governance framework necessary for the
execution and supervision of the Mid Term Business Plan
(2024-2026), and based on his above experience, insights
and achievements, the Company has determined that Mr.
Scott Trevor Davis would appropriately execute theduties as an essential Outside Director for this purpose.

81

Name
Yuri Okina

Main occupation

Reasons for appointment

Chairperson of the Institute, The Japan Ms. Yuri Okina has significant research experience
Research Institute, Limited
regarding financial systems and financial administration,
as well as abundant knowledge of economics andfinancial situations.
Since her appointment as an Outside Director of theCompany, she has been contributing to ensuring
appropriate decision making of the Board of Directors
from a wide range of perspectives, including
sustainability, capital policy, and governmental policy
trends. She was appointed as Chairperson of theCompensation Committee in 2016 when the Company
made the major transition to the “Company with
Nominating Committee, etc.” Since then, she has beenplaying a leading and extremely vital role in considering,
establishing, and verifying compensation plans thatpromise a more adequately incentivizing effect, etc., tocontribute to realizing the Company’s management andbusiness strategies. At the same time, she has also been
participating in active deliberations on succession
planning for Directors and Executive Officers as amember of the Nominating Committee.
In view of these experiences, insights, and achievements,
Ms. Yuri Okina is expected to continue to fulfill theseroles, and the Company has determined that she qualifies
as an Outside Director.

82

Name

Main occupation

Reasons for appointment

Kenichi Masuda

Attorney-at-law (Partner of Anderson
Mori & Tomotsune)

Mr. Kenichi Masuda has abundant professional careerand experience as an attorney-at-law at law firms inJapan and overseas, as well as his expertise as
represented by his current experience of teaching
corporate law at a graduate school of law.
Since his appointment as Outside Director of theCompany, he has been contributing to ensuring
appropriate decision making of the Board of Directors
from a wide range of perspectives, not only legal and risk
management, but also shareholder returns andorganizational strategies. He was appointed Chairpersonof the Nominating Committee in 2021, following theCompany’s transition to its current executive framework
in 2020. Based on his extensive experience at theCompany, he has been playing a leading and extremely
vital role in strengthening the management execution
structure and oversight thereof by actively engaging in
the verification of the Board of Directors’ humanresources portfolio and the succession planning ofinternal and Outside Directors and Executive Officers,etc. In addition to participating in active deliberations asa member of the Compensation Committee, he has also
been playing a leading role as Chairperson of theCompliance Committee in verifying and discussing
further improvements to the Company’s complianceframework.
The role of considering the composition of the Board of
Directors necessary for execution and supervision of the
Mid Term Business Plan (2024-2026) has become evenmore important, and based on his above experience,
insights and achievements, the Company has determinedthat Mr. Kenichi Masuda would appropriately executethe duties as an essential Outside Director for thispurpose.

Kenzo Yamamoto

Representative, Office KY Initiative

Mr. Kenzo Yamamoto has abundant expertise on
financial market and financial systems, as well as his
deep insight regarding corporate management and risk
management.
Since his appointment as an Outside Director of theCompany, he has been contributing to ensuring
appropriate decision making by the Board of Directors
from the perspective of corporate management and risk
management in light of global conditions and humancapital improvement. Since 2018, as a Chairperson of the
Audit Committee, he has been strengthening our auditing
system on a global scale, etc., and in 2023, he played aleading and extremely vital role in the change of our
Independent Auditor, taking into consideration therotation system used for auditing firms in other countries.
In view of these experiences, insights, and achievements,
Mr. Kenzo Yamamoto is expected to contribute from amore diverse perspective, and the Company has
determined that he qualifies as an Outside Director.

83

Name
Yojiro Shiba

Yoko Suzuki

Main occupation

Reasons for appointment–

Mr. Yojiro Shiba has insights into the creation of value
and establishment of business from the perspective ofcustomers based on his deep insight as the result ofabundant corporate management experience in thefinancial industry and entertainment business industry.
Since his appointment as an Outside Director of theCompany, he has been contributing to ensuring
appropriate decision making of the Board of Directors
also from the perspective of whether the Company’sorganizational strategy leads to the enhanced
effectiveness of operations rooted in on-site activities, etc.
In addition, as a member of the Audit Committee, he has
been participating in active deliberations and working topromote the strengthening of our auditing system on a
global scale, etc., with a focus on improving efficiency
and effectiveness.
In view of these experiences, insights and achievements,
Mr. Yojiro Shiba is expected to continue to fulfill theseroles, and the Company has determined that he qualifies
as an Outside Director.

Attorney-at-law (Partner of Suzuki Sogo Ms. Yoko Suzuki has high expertise as an attorney-at-law,
Law Office)and abundant experience and deep insight as an outside
auditor and auditor of other companies and various
associations.
Since her appointment as an Outside Director of theCompany, she has been contributing to ensuring
appropriate decision making of the Board of Directors,
not only in risk management but also from the perspectiveof enhancing Talent creativity with an awareness ofdiversity and engagement. In addition, as a member of the
Audit Committee, she has been participating in active
deliberations and working to promote the strengthening of
our auditing system on a global scale, etc.
In view of these experiences, insights and achievements,
Ms. Yoko Suzuki is expected to continue to fulfill theseroles, and the Company has determined that she would
appropriately execute the duties as an Outside Director.

84

Name

Main occupation

Reasons for appointment

Yukari Kobayashi

Representative Partner, Amanda Life
Consulting LLC
Representative Member, JC1 LLC.

Ms. Yukari Kobayashi has deep insight regarding thedigital field and business strategy through her extensive
practical and management experience in the IT andconsulting industries.
Since her appointment as an Outside Director of theCompany last year, she has been contributing to ensuring
appropriate decision making of the Board of Directors
from the perspectives of global business strategies, suchas digital fields and risk management. In addition, as amember of the Audit Committee, she has been
participating in active deliberations and promoting thestrengthening of our auditing system on a global scale,including the establishment of an effective risk
management system.
In view of these experiences, insights and achievements,
Ms. Yukari Kobayashi is expected to continue to fulfill
these roles, and the Company has determined that she
qualifies as an Outside Director.

Yasuhiro Nakajima

Certified Public Accountant
Mr. Yasuhiro Nakajima has abundant professional career(Representative of Nakajima CPA Office) and experience in accounting audit and advisory services
as a Certified Public Accountant, and possesses expertisesuch as that involved in his teaching of accounting andaudit at a university.
Since his appointment as an Outside Director of theCompany last year, he has been contributing to ensuring
appropriate decision making of the Board of Directors,
not only in finance and accounting but also from theperspective of business strategy from a global standpoint.
In addition, as a member of the Audit Committee, he has
been participating in active deliberations and working topromote the strengthening of our auditing system on a
global scale, including through cooperation with theauditing firm that became the Company’s Independent
Auditor in 2023.
In view of these experiences, insights and achievements,
Mr. Yasuhiro Nakajima is expected to continue to fulfill
these roles, and the Company has determined that hewould appropriately execute the duties as an Outside
Director.

As a result of comparison with the Company’s Guidelines for Determining Whether Outside Directors Are
Sufficiently Independent, Mr. Scott Trevor Davis, Ms. Yuri Okina, Mr. Kenichi Masuda, Mr. Kenzo Yamamoto,
Mr. Yojiro Shiba, Ms. Yoko Suzuki, Ms. Yukari Kobayashi, and Mr. Yasuhiro Nakajima, who are outside
directors with no relationship of special interests with the Company, and there is no concern that conflicts ofinterest with general shareholders would arise, the Company has designated them independent outside
directors. The Company’s Guidelines for Determining Whether Outside Directors Are Sufficiently
Independent are described at the end.
In addition, outside directors’ holdings of the Company’s stock are described under “4 (2) 1) a. Members of
the Board.”

85

[Nominating Policy for Appointment to the Board]
The nominated candidates shall possess the character and insight required to be able to put the Bridgestone
Essence (corporate philosophy) into practice, the experience necessary to supervise the execution of businessas a member of the Board, and the tenacity needed to perform the duties expected of a member of the Boardof the Company.

(Outside Directors)
The Company takes into account the following:(1) The candidate’s expertise, experience and ability to make judgments from an independent perspective.
(2) The candidate’s absence of connections with the Group that would undermine their independence fromthe Group.**Specifically, the candidate’s ability to meet the conditions for independence as set out in the Company’s“Guidelines for Determining Whether Outside Directors Are Sufficiently Independent”(Members of the Board other than Outside Directors)
The Company takes into account the following:(1) The candidate’s scope of knowledge and experience regarding the business and its operations.
(2) The candidate’s managerial ability to delineate the Company’s ideal direction while taking actions
informed by the changing business environment.

[Guidelines for Determining Whether Outside Directors Are Sufficiently Independent]
To ensure that the Company achieves the objectivity and transparency necessary for appropriate corporate
governance, it is best that outside directors be as independent as possible.
The Company has accordingly established these guidelines concerning the requisite independence of Outside
Directors in the Company. If any of the following items applies to an Outside Director (or to a candidate forsuch position. The same applies hereafter), they shall be deemed to lack the required level of independence
for the Company. A person who:
1. In the past was an Executing Person of the Company or a consolidated subsidiary of the Company(collectively, the “Group”) (Note 1)
2. Is a major shareholder of the Company (Note 2)
3. Is an Executing Person of a company or entity to which one of the following is applicable:(1)

A major supplier or customer of the Group (Note 3)(2)

A major lender to the Group (Note 4)(3)

A company or entity of which the Group holds 10% or more of the voting shares

4. Is a certified public accountant belonging to an auditing firm that is an accounting auditor of the Group
5. Is a professional, such as a consultant, accountant, tax accountant, attorney-at-law, judicial scrivener, or
patent attorney who has received a large amount (Note 5) of money or other assets from the Group
6. Is a person who has received a large amount of donation from the Group (Note 6)
7. Is an Executing Person of another company, which position constitutes an interlocking director or
corporate auditor position (Note 7) for the Outside Director868. Has a close relative (Note 8) to which any of the above items 1 through 7 applies (but other than withrespect to item 4 or 5, limited to a significant person (Note 9))
9. Is a person to which any of the above items 2 through 8 has applied within the last five years
10. Notwithstanding the above, is a person with respect to which any other particular factors exist that could
create a conflict of interest with the Company(Notes) 1. This means one who is currently an executive member of the Board, executive officer, vicepresident-officer or other similar person or employee (each, for purpose of these Guidelines, an“Executing Person”) or who has been an Executing Person of the Group at any time in the past.
2. A “major shareholder” shall mean a shareholder holding 5% or more of the voting shares, either
in their own name or a third party’s name, as of the end of the Company’s fiscal year. If the major
shareholder is an organization such as a company (or other legal entity) or partnership, it shallmean an Executing Person of the organization.
3. A “major supplier or customer” means a supplier or customer of the Group’s products whose
annual total transactions with the Group exceeds 2% of the Company’s consolidated aggregate
sales or 2% of the consolidated aggregate sales of the other party. In addition, automobile
manufacturers which are customers of the Group’s tire products, and synthetic rubber
manufacturers and steel cord manufacturers which are suppliers to the Group are considered major
suppliers or customers regardless of actual annual transaction amounts.
4. A “major lender” means a financial institution from which the Group receives loans where theoutstanding loan amount as of the end of the Company’s fiscal year exceeds 2% of the Company’s
consolidated gross assets or 2% of the financial institution’s consolidated gross assets.
5. “Large amount” means the occurrence of either of the following in response to the professional’s
provision of services:(1) In the event that the professional is providing services to the Group as an individual, thereceipt by the professional from the Group of compensation (excluding remuneration forservices as a member of the Board or executive officer) of an amount exceeding 10 million
yen per year.
(2) In the event the professional services are provided to the Group by an organization such as acompany (or other legal entity) or a partnership, the receipt by the organization from theGroup of the total amount of compensation exceeding 2% of the annual aggregate income ofthe organization. Even if not more than 2%, if the organization receives more than 10 million
yen per year as compensation for services in which the professional was directly involved, it
is considered a “large amount.”
6. This means the recipient of a donation exceeding 10 million yen per year from the Group. If therecipient is an organization such as a company (or other legal entity) or a partnership, any memberof the organization who is directly involved with the research, education or other activity related
to the donation.
7. “Interlocking director or corporate auditor position” means an Executing Person of the Group who
is an Outside Director or Corporate Auditor for another company, where an Executing Person ofsuch other company is also an Outside Director of the Company.
8. A “close relative” means a spouse or a relative within two degrees of family relation.
9. A “significant person” means a member of the Board, executive officer, vice president-officer oran Executing Person who is a division manager or above, or an Executing Person with authority
similar to any of the foregoing.
3)

Mutual cooperation of oversight or audit performed by Outside Directors with internal audit, the Audit
Committee audit and accounting audit, as well as relationship with the internal control department

Outside Directors consider financial statements and policies for development of internal control systems, anddirectly or indirectly receive reports from the internal control department, through deliberation of proposals at
the Board of Directors such as information on operations based on such development policies, providing
effective oversight of executive officers and members of the Board. Mutual cooperation of oversight or audit
87performed by Outside Directors with internal audit, and the Audit Committee audit and accounting audit aredescribed in “4. (3) Status of audit.”88

(3) Status of audit
1)

Audit by the Audit Committeea. Organization and personnel
The Company’s Audit Committee in the current fiscal year consists of a total of seven members, comprising
five outside directors and two internal full-time members. Mr. Yasuhiro Nakajima, a member of the Audit
Committee, has abundant professional experience in accounting audit and advisory work as a Certified Public
Accountant, as well as considerable knowledge in finance and accounting. Mr. Tsuyoshi Yoshimi, a full-timemember of the Audit Committee, was in charge of accounting operations of the Company for many years andhas considerable knowledge in finance and accounting.
In order to assist with the duties of the Audit Committee, the Company has assigned a corporate executive
manager dedicated to audit, and established a department led by such corporate executive manager that isdedicated to assist the Audit Committee with their duties. Decisions on the appointment and replacement of
the corporate executive manager dedicated to audit are made with the consent of the Audit Committee, while
the performance assessment of such corporate executive manager is determined by taking the performance
evaluations conducted by the Audit Committee into consideration.
After the close of the Annual Shareholders’ Meeting to be held on March 26, 2024, the Committee will consistof six members: four outside directors and two internal full-time members.
b. Activities of the Audit Committee(a) Frequency of Audit Committee meetings
The Audit Committee convened a total of 19 meetings during the current fiscal year. This included regularmeetings between Representative Executive Officers and the Audit Committee on five occasions, which
involved exchanges of various opinions and advice from the Audit Committee.
The total time of the meetings came to 57 hours, which works out to three hours and 50 minutes per meeting(excluding regular meetings with the Representative Executive Officers). The status of attendance by
individual members of the Audit Committee is as follows.
Position

Name

Attendance at Audit Committee meetings

Chairperson of the Audit Committee

Kenzo Yamamoto

19 of 19 (100%)

Member of the Audit Committee (Note 1)

Keikou Terui

5 of 5 (100%)

Member of the Audit Committee (Note 1)

Seiichi Sasa

5 of 5 (100%)

Member of the Audit Committee

Yojiro Shiba

19 of 19 (100%)

Member of the Audit Committee

Yoko Suzuki

19 of 19 (100%)

Member of the Audit Committee (Note 2)

Yukari Kobayashi

14 of 14 (100%)

Member of the Audit Committee (Note 2)

Yasuhiro Nakajima

14 of 14 (100%)

Full-time member of the Audit Committee(Note 1)

Hideo Hara

Full-time member of the Audit Committee(Note 2)

Akira Matsuda

Full-time member of the Audit Committee

Tsuyoshi Yoshimi(Note 1) Retired on March 28, 2023.
(Note 2) Appointed on March 28, 2023.

89

5 of 5 (100%)
14 of 14 (100%)
19 of 19 (100%)

(b) Activities of the Audit Committee and members of the Audit Committee
A. Resolutions and reports by the Audit Committee
There were ten resolutions passed by the Audit Committee during the current fiscal year. The main content
of these resolutions was related to audit report, audit policies and planning, assignment of duties ofcommittee members, agreement on audit fees of the accounting auditor, and reappointment of theaccounting auditor. There were also 111 reports. These reports included the audit report from the accounting
auditor, reports from the Internal Auditing Department on internal audits and Group internal audit activities,risk management activity reports from operating divisions involved in business execution, and reports on
the activities of the full-time members of the Audit Committee.
B. Activities of the members of the Audit Committee
In addition to the resolutions and reports above, members of the Audit Committee directly exchange
opinions and provide advice in regular meetings with Representative Executive Officers. Moreover, they
confirm management issues and the state of business through their attendance at Global EXCO and otherimportant meetings. They also make on-site visits to major Group companies and business locations inJapan and overseas to conduct audits regarding the status of execution of duties and the implementation
status of internal control systems at such locations. As for the accounting audit, the Audit Committee
receives reports and explanations on audit plans, audit methods, and results from the accounting auditor,
and then verifies the appropriateness of the results. The members of the Audit Committee also hold meetings
with accounting auditors in charge of major overseas Group companies when making on-site visits to such
Group companies to receive explanations regarding the status of audits.
In addition to the duties above, the full-time members of the Audit Committee strive to improve audit
effectiveness by attending regular monthly executive committee meetings and other important meetings,
engaging in daily information gathering efforts in cooperation with the internal audit divisions, andreporting to the Audit Committee.
The Audit Committee has been holding meetings both in-person and remotely online for the sake ofefficiency subsequent to relaxation of restrictions that had been imposed on movement due to COVID-19.
Additionally, the Committee seeks to ensure effectiveness of its activities by making on-site visits in person
to locations in Japan and overseas.
C. Priority audit matters for the current fiscal year
Having identified the following four issues warranting focus for the current fiscal year, the Audit Committee
conducted audit activities in cooperation with the Internal Auditing Department and the accounting auditor.
(A) Confirmation of the execution status of transformation and Mid-Long Term Business Strategies
centered around the “Bridgestone E8 Commitment”
The Audit Committee has designated as priority items for the current fiscal year confirmation of: the statusof Group-wide initiatives related to the “Bridgestone E8 Commitment” corporate commitment establishedby the Company in March 2022; the impact on its business and internal control systems of various
measures implemented within the mid- to long-term business plan; and the status of initiatives related tosustainability, the solutions business, and Talent creativity. The Audit Committee has confirmed suchmatters through reporting to the Board of Directors, reports from relevant divisions at Audit Committee
meetings, and on-site visits made to business locations in Japan and abroad.
(B) Confirmation of the Group’s risk management systems and their implementation status with respect
to risks affecting business
The Audit Committee has confirmed the status of improvements made to the Group’s risk management
systems, and response to business risks such as cyberattacks, geopolitical risk, and epidemics. In addition
to receiving reports from relevant divisions at Audit Committee meetings, the Committee does this throughattendance at various internal meetings and through consultations with the Internal Auditing Department
and the Group’s internal audit divisions.

90

(C) Confirmation and advice on status of improvements made to the monitoring system for the Group’s
internal control based on the “Three Lines of Defense” approach
The Audit Committee has confirmed and furnished advice on the status of improvements made to themonitoring system for the Group’s internal controls based on the “Three Lines of Defense” approach,through collaboration with the Internal Auditing Department and the SBU Audit Committee and throughon-site visits made to business locations in Japan and abroad.
(D) Confirmation of appropriate collaboration with the newly appointed accounting auditor and status of
performance of duties thereof
The Audit Committee has confirmed the status of performance of duties of KPMG AZSA LLC, the newly
appointed accounting auditor effective from the current fiscal year, and of its overseas network (KPMG
Group), and also confirmed the status of collaboration with the Company and companies of the Group. To
such ends, the Audit Committee has had a series of meetings with KPMG AZSA LLC, and also held
meetings and consulted with local KPMG Group when making on-site visits to major overseas locations.
2)

Status of internal auditsa. Organization, personnel and procedures
The Group’s internal auditing organization is comprised of the Internal Auditing Department and the SBU
internal audit divisions established at each SBU.
In striving to operate in accordance with standards of The Institute of Internal Auditors (IIA), the Internal
Auditing Department formulates an annual audit plan and reports it to the Audit Committee, and, based onthat, conducts internal audits primarily of the effectiveness of Group governance and internal control on eachfunction, operating division, and Group companies in Japan and overseas. In addition, the Internal Auditing
Department supervises activities of the Group’s internal audit system and works with the internal audit
divisions at each SBU and the internal audit function of domestic subsidiaries on activities aimed at
establishing an optimal internal audit system for the Group. The internal audit divisions of overseas SBUs
submit audit reports and activity reports to the respective overseas SBU Audit Committees. Meanwhile, theInternal Auditing Department collects this information in monthly meetings with the internal audit divisionsof overseas SBUs, and regularly reports it to the Audit Committee. As of March 26, 2024, the Internal Auditing
Department had 34 employees, and internal audit divisions of overseas SBUs had approximately 70 employees.
b. Mutual cooperation of internal audit, the Audit Committee audit and accounting audit
The Internal Auditing Department exchanges information and opinions with the Audit Committee, the Group’s
internal auditing organization and the accounting auditor as necessary, and generally maintain close contact,
thereby working to further increase audit efficiency and effectiveness.
c. Internal audits, Audit Committee audits, and accounting audits, and relationship with internal control
department
The Internal Auditing Department strives to improve and strengthen internal controls by auditing thedevelopment and operational status of internal controls at locations in Japan and overseas and then reporting
the findings to the Audit Committee, while simultaneously working with respective departments in charge ofinternal controls (internal control department). Regarding internal controls related to financial reporting, theInternal Auditing Department works with the accounting auditor and internal control department in striving toconfirm and improve the status of controls, and in reporting the evaluation results to the Audit Committee andthe Board of Directors. Furthermore, the Audit Committee confirms the development and operational status
of internal controls upon receiving reports directly from the respective departments in charge of internal
controls, as previously noted in “1) Audit by the Audit Committee,” and simultaneously exchanges opinions
as necessary.
d. Initiatives to secure the effectiveness of internal audits
The Internal Auditing Department ensures independence from operating divisions from the perspective ofensuring effective audits by receiving instructions from and regularly reporting directly to the Audit
91

Committee. It also regularly reports directly to the Global CEO under the dual reporting line approach. With
the Company working to further elevate the level of its audits, an external professional institution assessed theInternal Auditing Department and the internal audit division of BSAM as generally in compliance with the
IIA’s Global Internal Audit Standards in 2022 and 2023, respectively.
3)

Status of accounting auditsa. Auditing firm
KPMG AZSA LLC
b. Consecutive audit period
One yearc. Certified public accountants who performed the audit
Mr. Hirotaka Tanaka
Mr. Kentaro Maruta
Mr. Ayumu Nakajima
d. Composition of assistants involved in auditing operations
19 certified public accountants, seven associate members of the Japanese Institute of Certified Public
Accountants, and 48 other staff members are involved in the accounting auditing operations.
e. Policy and reasons for appointment of accounting auditor
To ensure the appropriate performance of duties by the accounting auditor, the Audit Committee appoints
an appropriate accounting auditor from perspectives such as the quality control system, auditing systems,
audit plans and audit fee levels.
The Audit Committee dismisses the accounting auditor with a unanimous resolution in the event where it
determines the accounting auditor falls under any items of Article 340, paragraph (1) of the Companies
Act. In this case, the members of the Audit Committee appointed by the Audit Committee must report its
decision and the reason for dismissal to the first Shareholders’ Meeting after the dismissal. In addition to
the above, in the circumstances where the Audit Committee deems it necessary for securing an appropriate
auditing system or for its improvement, the Audit Committee determines details of the proposal for nonreappointment of the accounting auditor, based on which the Board of Directors submits the proposal to
the Shareholders’ Meeting.
According to the above policy, as a result of receiving the necessary reports and evaluation based on
predetermined evaluation criteria concerning the auditing systems, independence, audit plans, and statusof performance of duties of KPMG AZSA LLC, the current accounting auditor, the Audit Committee hasreappointed the same firm as the accounting auditor for the 106th Fiscal Period (fiscal year 2024).
f. Change of accounting auditor
Changes made with respect to the Company’s accounting auditor are as follows.
104th Fiscal Period (from January 1, 2022 to December 31, 2022) (Consolidated and Non-consolidated)
Deloitte Touche Tohmatsu LLC
105th Fiscal Period (from January 1, 2023 to December 31, 2023) (Consolidated and Non-consolidated)
KPMG AZSA LLC
The matters included in the extraordinary securities report are as follows.
92

(a) Name of the auditing certified public accountants, etc. pertaining to the changeA) Name of the elected auditing certified public accountant, etc.
KPMG AZSA LLC
B) Name of the retiring auditing certified public accountant, etc.
Deloitte Touche Tohmatsu LLC(b) Date of the change
March 28, 2023 (The date of the 104th Annual Shareholders’ Meeting)(c) Date on which the retiring auditing certified public accountant, etc. assumed the position as auditing
certified public accountant, etc.
March 29, 2001(d) Matters concerning the opinion, etc. on audit reports prepared by the retiring auditing certified public
accountant, etc. during the most recent three years
No item to report.

(e) Reason and background that led to the decision to make the change or the change
The term of office of the Company’s Independent Auditor, Deloitte Touche Tohmatsu LLC, expiredat the close of the 104th Annual Shareholders’ Meeting held on March 28, 2023. Due to the fact that
Deloitte Touche Tohmatsu LLC has served as the Company’s Independent Auditor for many years,
and taking into consideration the rotation system used for auditing firms in other countries, the Audit
Committee decided to accept proposals from multiple auditing firms on a periodic basis and compare
said proposals. The Audit Committee concluded that the appointment of KPMG AZSA LLC as the
new Independent Auditor would bring a new perspective to auditing. Furthermore, the Audit
Committee deemed that KPMG AZSA LLC’s specialization, independence, quality management
system, global auditing structure, and the like all well meet the requirements set by the Audit
Committee.

(f) Opinion on the reason and background that led to the change set forth in (e) aboveA) Opinions of the retiring auditing certified public accountant, etc.
We have received a reply that they have no particular opinion.
B) Opinion of the Audit Committee
The Committee deems it appropriate.

g. Evaluation of the accounting auditor
The Audit Committee prescribes evaluation criteria that conforms with the practical guidelines prescribedby the Japan Audit & Supervisory Board Members Association, and evaluates the accounting auditor
annually in light of such criteria. When conducting such evaluation, the Audit Committee deliberates onreports mainly on matters, including the auditing systems, independence, specialization, audit plans, and93

status of performance of duties that are received from the accounting auditors and relevant internal
departments.
From the standpoint of independence of the accounting auditor, the Audit Committee has established a
new policy unique to the Company to limit non-audit fees provided by the accounting auditor and its groupand receives regular reports from the accounting auditor to verify the status thereof.

94

4)

Audit fees
a. Fees to auditing certified public accountants, etc.
Previous fiscal year
Category

Fees for audit services(Yen in millions)

The Company
Consolidated
subsidiaries
Total

Current fiscal year

Fees for non-audit
services (Yen in
millions)

Fees for audit services(Yen in millions)

Fees for non-audit
services (Yen in
millions)

239

6

215

–

238

–

205

–

477

6

420

–

(Notes) 1. The audit agreement entered into by the accounting auditors and the Company does not separately stipulate the fee
amounts for the audit under the Companies Act and the audit under the Financial Instruments and Exchange Act.
Furthermore, those two amounts cannot be practically distinguished from one another, so this report lists the total
amount that should be paid to the accounting auditors.
2. Figures presented for the previous fiscal year represent fees paid to Deloitte Touche Tohmatsu LLC. Figures presented
for the current fiscal year represent fees paid to KPMG AZSA LLC.
3. The details of non-auditing services provided to the Company by auditing certified public accountants, etc. are as
follows.
(Previous fiscal year)
Services (non-auditing services) other than those set forth in Article 2, paragraph (1) of the Certified Public
Accountants Act for which the Company has paid fees to the accounting auditors are the English translation services
for consolidated financial statements and other documents.
(Current fiscal year)
No item to report.
4. In regard to fees for audit services in the previous fiscal year, additional fees other than the above came to 20 million
yen.

b. Fees to companies in the same network as the auditing certified public accountants, etc. (excluding a.)Previous fiscal year
Category

Fees for audit services(Yen in millions)

Current fiscal year

Fees for non-audit
services (Yen in
millions)

Fees for audit services(Yen in millions)

Fees for non-audit
services (Yen in
millions)

The Company

–

28

–

96

Consolidated
subsidiaries

2,392

522

1,846

117

Total

2,392

550

1,846

213

(Notes) 1. Figures presented for the previous fiscal year represent fees paid to the companies in the same network as Deloitte
Touche Tohmatsu LLC (the Deloitte network). Figures presented for the current fiscal year represent fees paid to thecompanies in the same network as KPMG AZSA LLC (KPMG Group).
2. The details of non-auditing services provided by companies in the same network as the auditing certified public
accountants, etc. are as follows.
(Previous fiscal year)
Non-auditing services provided to the Company and consolidated subsidiaries are advisory services concerning tax
and IT, etc.
(Current fiscal year)
Non-auditing services provided to the Company and consolidated subsidiaries are advisory services concerning tax,
etc.

95

c. Details of fees for other important audit services
No item to report.
d. Policy for determining audit fees
The Company determines audit fees paid to its accounting auditors based on verification of the number ofrequired man-hours and the appropriateness of the amounts according to the audit plans. The consent of
the Audit Committee is obtained for such determination.
e. Reasons for the Audit Committee’s consent to the audit fees
As a result of confirmation and consideration of the details of the accounting auditors’ audit plans, thebasis of calculation for the fee quotation and non-audit fees, the Audit Committee deems the fees forservices set forth in Article 2, paragraph (1) of the Certified Public Accountants Act to be reasonable andprovides the consent pursuant to Article 399, paragraph (1) of the Companies Act.

96

(4) Remuneration for Members of the Board and Executive Officers
1)

Board Members’ and Executive Officers’ remuneration for the current fiscal year

a. Total amount of remuneration, amount of each type of remuneration, and the number of recipients by thecategories of Members of the Board and Executive Officers
Amount of each type of remuneration (Yen in millions)
Position category

Performance-based remuneration
Fixed
Stock
Stock
remuneration Annual bonuses compensation compensation(PSU)(RSU, etc.)

Total

Number ofrecipients (inpersons)

Members of the Board(Internal)

110

–

–

–

110

5

Members of the Board(Outside)

179

–

–

–

179

10

Executive Officers

215

163

227

195

800

5

Total

504

163

227

195

1,089

18

(Notes) 1.

Allowance for Executive Officers who hold concurrent positions as Members of the Board (additional allowancefor Members of the Board with concurrent duties) is included in the total amount of remuneration for Members of
the Board.

2.

The amount of fixed remuneration in the above table (total amount of base remuneration, additional allowance forMembers of the Board with concurrent duties, additional allowance for the chairpersons, and additional allowancefor committee chairs) is the total amount of remuneration paid during fiscal year 2023 (fully paid in cash). (Including
remuneration for Members of the Board and Executive Officers who retired during the current fiscal year.)3.

Of the annual bonuses in the above table, Group-wide performance-based bonus is the amount expected to be paidin March 2024 based on the results of business performance, etc. of fiscal year 2023 (fully paid in cash), andperformance-based bonus (area of responsibility) is the total amount of the actual payment during fiscal year 2023
(reflecting the previous fiscal year’s business performance) and the standard amount expected to be paid in March

4.

2024.
The stock compensation of the performance-based remuneration in the above table represents the total amount
expensed up to fiscal year 2023 (excluding the portion disclosed in prior years).
- The Performance Share Unit (PSU) is awarded in the form of shares of the Company’s common stock or othersecurities according to Group-wide performance over a three-year period. (50% is paid in cash equivalent to themarket value; however, those retiring before the relevant period ends are paid fully in cash equivalent to themarket value.)- The Restricted Stock Unit, etc. (RSU, etc.) is a system under which RSU and Restricted Stock (RS) are granted
according to the evaluation of initiatives related to sustainability, including ESG, and transformation in eachfiscal year. Transfer restriction for RS will be lifted at the time of retirement, and for RSU, cash is paid equivalent
to the market value of the number of stock units at the time of the lifting of the RS transfer restriction. The ratioof emphasis on RS and RSU is set at 50:50.

5.

Two Executive Officers who hold concurrent positions as Members of the Board are included in the numbers ofMembers of the Board (Internal) and Executive Officers, respectively.

6.

One Member of the Board (Internal), two Members of the Board (Outside), and one Executive Officer who retired
during fiscal year 2023 are included in the numbers of Members of the Board and Executive Officers, respectively.

97

b. Total amount of consolidated remuneration for persons received consolidated remuneration of 100 million
yen or more.
Total amount of consolidated remuneration (Yen in millions)Names and principal
positions related to thecurrent fiscal year

Company
category

Stockcompensation(RSU, etc.)

–

–

–

92

71

83

69

Member of the Board

12

–

–

–

Executive Officer

68

59

62

53

The Company

Executive Officer

–

–

59

53

BSAM
(Note 1)

Member of the Board,
CEO and President

199

79(Note 2)75–

The Company

Executive Officer

50

33

24

21

The Company

2.

Stock
compensation
(PSU)

12

Masahiro Higashi,
Joint Global COO(Notes) 1.

Annual bonuses

Executive Officer

The Company

Masato Banno,
Global CTO

Fixed
remuneration

Member of the Board

Shuichi Ishibashi,
Global CEO

Paolo Ferrari,
Joint Global COO

Performance-based remuneration
Position category

Total

327
254

465
128

The remuneration of executives at BRIDGESTONE AMERICAS, INC. (BSAM) is determined taking into accountbusiness performance, etc. of BSAM, following investigation, analysis and consideration of matters such as market
levels for remuneration of directors and executive officers in the incumbent’s location of the United States when
determining remuneration. Fixed remuneration includes an amount equivalent to fringe benefits.
In addition to annual bonuses, the followings are listed: the confirmed amount paid for the long-term incentive planpertaining to FY2021 to FY2023; the amount recorded as expense relating to FY2022 to FY2023 for the long-term
incentive plan pertaining to FY2022 to FY2024; and the amount recorded as expense relating to FY2023 for the
long-term incentive plan pertaining to FY2023 to FY2025. (However, this excludes the portion disclosed in prioryears.)

c. Calculation method and evaluation results of performance-based remuneration(a) Short-term incentives (annual bonuses)<Group-wide performance-based bonus>
The Group-wide performance-based bonus for fiscal year 2023 was paid at 85.6% of the standard amount,in accordance with the evaluation of the performance indicators as follows.
(Recipients: Global CEO and Representative Executive Officer, Joint Global COO and Representative
Executive Officer, Senior Vice Presidents and Executive Officers)
Performanceindicator
Amount ofconsolidated
adjusted operating
profitFluctuation rangeof payment rate

0-150%

Results for fiscal
year 2023(Yen in billions)Target for fiscal year 2023*(Yen in billions)
Maximum:

612.0

Target:510.0

Threshold:408.0

480.60

Payment rate

85.6%

* In its Mid Term Business Plan and other initiatives, the Company aims to become a more resilientand highly profitable company, and accordingly, has positioned adjusted operating profit as one ofits key management indices and selected it as an appropriate indicator for the annual evaluation of
executive remuneration.
Standard amount by position
Bonus payment by individual =(Group-wide performancebased bonus)

×

Payment rate
85.6%

<Performance-based bonus (area of responsibility)>
The amount of bonus payment for Joint Global COO and Representative Executive Officer for fiscal year
2023 has been determined by the Compensation Committee at a meeting held in March 2024, based on
the achievement of the performance in the area of responsibility as the person in charge of the business,while comprehensively taking into consideration important initiatives, etc., being carried out in light ofthe business environment in the area of responsibility.

The amount of bonus payment for Senior Vice Presidents and Executive Officers for fiscal year 2023 hasbeen determined by the Compensation Committee at a meeting held in March 2024, based on theindividual performance evaluation for the functions for which they are responsible.


98

(Recipients: Joint Global COO and Representative Executive Officer, Senior Vice Presidents andExecutive Officers)
Bonus payment by individual =Standard amount by position(Performance-based bonus

×(area of responsibility))

Payment rate (Individual
performance evaluation)(0-150%)Since Joint Global COO and Representative Executive Officer, and Senior Vice Presidents and Executive
Officers have important roles and responsibilities not only for improving consolidated financial
performance but also for improving their area of responsibility and functions over the medium to longterm, the ratio of emphasis on Group-wide performance bonus (based on evaluation of consolidated
financial performance) and performance-based bonus for area of responsibility (based on individual
performance evaluation) is set at 60:40 on a standard amount basis.

(b) Mid- to long-term incentives (stock compensation)<Performance Share Unit (PSU)>The 2021 Plan (evaluation period: 2021 to 2023), for which the evaluation was finalized in fiscal year
2023, resulted in a payment of 83.0% of the standard number of shares, based on the evaluation of
performance indicators as follows. 50% is delivered in the form of the Company’s common stock, andthe remaining 50% is paid in cash equivalent to the market value.
(Recipients: Global CEO and Representative Executive Officer, Joint Global COO and Representative
Executive Officer, Joint Global COO and Executive Officer, Senior Vice Presidents and Executive
Officers)
Performanceindicator

Evaluation ratio

Consolidated
ROIC

80%

Consolidated
ROE

20%

Number of shares by
individual*

Fluctuation
range ofpayment rate
0-200%

0-200%=

Target for fiscal year 2023

Results

Maximum:

14%

Target:10%

Threshold:6%

Maximum:

16%

Target:12%

Threshold:

8%Standard number of shares by
position*×

Payment rate

8.7%

83.8%

10.4%

80.0%

Payment rate (weighted-average)

83.0%

Payment rate
83.0%

The “standard number of shares by position” above is calculated by dividing the standard amount by position by theCompany’s stock price at the beginning of the performance evaluation period.

<Restricted Stock Unit, etc. (RSU, etc.)>
The payment of RSU, etc. for fiscal year 2023 was 110% of the standard amount, in overall considerationof achievement status of the sustainability targets ((1) establishment of “Bridgestone E8 Commitment”
as corporate commitment to evolve into a sustainable solutions company toward 2050 andcommunication with stakeholders both inside and outside of the Company, (2) investment in anddevelopment of people to increase added value and job satisfaction, (3) carbon neutrality, including
reduction of CO2 emissions, (4) circular economy, including increasing the ratio of recycled andrenewable resources, and (5) activities for achieving a nature-positive world, establishment of Water
Stewardship Policy). The Compensation Committee commended the Company for having exceeded its
targets for fiscal year 2023, specifically the major quantitative targets set forth in the Mid Term Business
Plan (such as reducing CO₂ emissions and increasing the ratio of recycled and renewable resources). The
Compensation Committee also commended the Company for having achieved steady progress withrespect to investment in developing young people and talent who will lead the future of the Company.
The number of individual stock units to be provided as RSU and the number of individual shares to bedelivered as RS are calculated by dividing the “Amount of RSU, etc. payments by individual” statedbelow by the Company’s stock price at the time of the share unit provision and share delivery.
99

(Recipients: Global CEO and Representative Executive Officer, Joint Global COO and Representative
Executive Officer, Joint Global COO and Executive Officer, Senior Vice Presidents and Executive
Officers)
Amount of RSU, etc.
payments by individual=Standard amount by position

×

Payment rate110%

d. Activities of the Compensation Committee(a) The number of meetings of the Compensation Committee and attendance of members
In fiscal year 2023, the Compensation Committee held 15 meetings mainly regarding the amount ofexecutive compensation, with full attendance for every meeting. In addition, a third-party humanresources and remuneration consultant provided objective and specialized input necessary fordeliberations, as necessary.
(b) Specific matters resolved, deliberated and considered at the Compensation Committee
The Compensation Committee mainly deliberated, decided, or confirmed the following during fiscal
year 2023.
 Discussed the evaluation of performance-based remuneration for the previous fiscal year
(consolidated financial performance evaluation for Group-wide performance-based bonus,
individual performance evaluation for performance-based bonus (area of responsibility),
consolidated financial performance evaluation for PSU, and evaluation of initiatives related tosustainability and transformation pertaining to RSU, etc.) and determined the amount to be paid toeach individual and the number of shares to be delivered.
 Discussed and decided on the performance-based remuneration targets for fiscal year 2023
(consolidated financial performance targets related to Group-wide performance-based bonus and
PSU, and sustainability-related initiative targets related to RSU, etc.).
 Deliberated the appropriateness of the current remuneration level and composition of Joint Global
COO and Executive Officer Paolo Ferrari for fiscal year 2023, in light of the size of his role andresponsibilities as well as the remuneration level and practices of his place of residence.
 Deliberated the appropriateness of remuneration, etc. paid by major overseas Group companies totheir Chair, CEO, and COO based on reports received on such remuneration, etc.
 Made decisions on the remuneration system for the subsequent fiscal year with respect to the level
and composition of remuneration for Members of the Board and Executive Officers. This involved
comparing the level and composition of such remuneration with that of major companies in Japan
operating globally to verify the appropriateness and then discussing the matter of appropriate
remuneration level and composition in alignment with the Company’s principles of remuneration.
(c) Adequacy and appropriateness of individual remuneration for Members of the Board and Executive
Officers
Individual remunerations for Members of the Board and Executive Officers for the current fiscal year
are set by the Compensation Committee, composed solely of Independent Outside Directors, by carryingout multifaceted discussions including consistency of remunerations with the policy for setting
remunerations based on objective and specialized information necessary for deliberations, as describedin paragraphs (a) and (b) above. Therefore, the Committee has determined that the individual
remunerations for Members of the Board and Executive Officers are in line with the policy and are
adequate.
2)

Policy for setting Board Members’ and Executive Officers’ remuneration for the subsequent fiscal year

a. Method for deciding the policy for setting Board Members’ and Executive Officers’ remuneration and key
points for the subsequent fiscal year(a) Method for deciding the policy for setting Board Members’ and Executive Officers’ remuneration
The policy for setting remuneration by position and individual remunerations to the Company’s Board
Members and Executive Officers is determined by the Compensation Committee, composed solely of
Independent Outside Directors, by taking into account changes in the business environment and opinions
100

of our shareholders and investors, upon obtaining the information necessary for deliberations from thirdparty human resources and remuneration consultants who possess abundant global experience andinsight.
(b) Key points for the policy for setting Board Members’ and Executive Officers’ remuneration
The Company decided to review levels of remuneration for Members of the Board upon having
compared such levels with those of major companies in Japan operating globally. There are no otherparticular matters that require mentioning regarding the policy for setting Board Members’ and Executive
Officers’ remuneration for the subsequent fiscal year.
b. Policy for setting Board Members’ and Executive Officers’ remuneration(a) Principles of remuneration
The Company designs the remuneration system for Board Members and Executive Officers based on thefollowing remuneration principles.
• Attract and cultivate superior talent• Support a competitive remuneration level
Principles of remuneration• Provide motivation for the execution of businessstrategies• Provide motivation for enhancing shareholder value(b) Remuneration system<Executive Officers>
Remuneration of Executive Officers consists of the following.
Type of remuneration
Fixed

Overview
Base remuneration
Performance-based
bonus (Group-wide)

Short-term incentives

Performance-based
bonus (area of
responsibility)

 Monthly cash remuneration determined based on role andresponsibilities (position, etc.) of each Executive Officer

 Cash remuneration paid based on the evaluation of Group-wide
performance (amount of consolidated adjusted operating profit) for
each fiscal year Cash remuneration paid based on the individual performance
evaluation for each fiscal year
(Recipients: Joint Global COO and Representative Executive
Officer, Senior Vice Presidents and Executive Officers)

 Remuneration provided for sharing value with shareholders andPerformance Share
Unit (PSU)

VariableMid- to long-term
incentives

raising motivation to contribute to achievement of mid-term
performance targets and the improvement of corporate value Shares, etc. delivered according to Group-wide performance (ROICand ROE) over a three-year period (50% is paid in cash equivalent
to the market value) Remuneration provided for sharing value with shareholders andencouraging executive officers to realize the Mid-Long TermBusiness Strategy with sustainability at the core
 RSU, etc. are provided according to the evaluation of sustainability
Restricted Stock Unit,
and transformation initiatives in each fiscal year, and vest at time of
etc. (RSU, etc.)
retirement.
(50% is provided as stock units, and cash equivalent to the market
value is paid at time of retirement. The remaining 50% is provided
as restricted stock, and the transfer restriction is lifted uponretirement.)<Members of the Board> Remuneration for Members of the Board who do not concurrently serve as Executive Officers consistsof a fixed “base remuneration,” “additional allowance for the chairpersons” when an Outside Director
assumes the position of Chairperson of the Board of Directors, and “additional allowance for committee
chairs” when an Outside Director assumes the position of chairperson of statutory or voluntarycommittees. This is in view of their role to contribute to the improvement of corporate performance andvalue over the medium- to long-term by supervising overall execution from an independent and objective
perspective.

101 If an Executive Officer concurrently serves as a Member of the Board, he/she will receive, in addition to
his/her remuneration as an Executive Officer, “additional allowance for Members of the Board withconcurrent duties” for his/her role and responsibilities as a Member of the Board.
(c) Method of setting remuneration levels and composition ratio of remuneration<Executive Officers>
 The Company sets remuneration for Executive Officers at an appropriate amount according to each
Executive Officer’s role and position by referring to remuneration levels, etc. of other major companies
in Japan, which are equal or greater in size (net sales and market capitalization) and profitability(operating profit ratio) than the Company and operate globally in the same manner as the Company(hereinafter the “Peer Companies”).
 While base remuneration is set at a middle level of the Peer Companies, the ratio of variable remunerationis, in principle, set higher for higher positions with greater responsibility for business performance andcorporate value, by referring to European companies. The Company aims to set the total remuneration
at a level that ensures a certain level of competitiveness among the Peer Companies.

The following charts show the composition ratio of remuneration for Executive Officers by position if
the variable remuneration is the standard amount.
<Global CEO and Representative<Joint Global COO and<Senior Vice President andExecutive Officer>
Representative Executive Officer>
Executive Officer><Members of the Board> Remuneration for Members of the Board who do not concurrently serve as Executive Officers is set inconsideration of factors such as remuneration levels at the Peer Companies and companies with
Nominating Committee, etc., the roles and functions expected of each Member of the Board, and theworkload involved in executing their duties.
(d) Performance indicators of performance-based remuneration and reasons for the selection
 The Company selects the following as performance indicators of performance-based remuneration basedon the Mid-Long Term Business Strategy and the Mid Term Business Plan.
Short-term incentives(*1)
Performance-based bonus (Group-wide)

Performance-based bonus (area of responsibility)<Enhancement of earning power and profitability>
Consolidated adjusted operating profit<Achievement in area of responsibility/strategic targets>
Individual performance evaluation

100%

100%
Mid- to long-term incentives(*2)

PSU

RSU, etc.

<Review of business portfolio><Improvement of profitability over mid-term><Realization of transformation/sustainability businessframework>

ROIC

ROE

Evaluation of sustainability

80%

20%

100%

*1. The ratio of emphasis on Group-wide performance-based bonus and performance-based bonus (area of responsibility)
is set at 60:40 in view of the roles and responsibilities Joint Global COO and Representative Executive Officer andSenior Vice Presidents and Executive Officers bear. (The Global CEO and Representative Executive Officer only
receives Group-wide performance-based bonuses).
*2. The ratio of emphasis on PSU (financial evaluation) and RSU, etc. (non-financial evaluation) is set at 50:50 uniformly
for all Executive Officers.

102

(e) Short-term incentives (annual bonuses)<Group-wide performance-based bonus>The amount of individual Group-wide performance-based bonus is determined within a range of 0% to150% of the standard amount, according to the degree to which targets of consolidated adjusted operating
profit are achieved.
(Recipients: Global CEO and Representative Executive Officer, Joint Global COO and Representative
Executive Officer, Senior Vice Presidents and Executive Officers)
Standard amount by position
Bonus payment by individual =(Group-wide performancebased bonus)

Evaluation of consolidated×

adjusted operating profit(0-150%)<Target for fiscal year 2024>
Evaluation (payment rate)

Consolidated adjusted operating profit

Threshold:Target:Maximum:
424.0
530.0
636.0
(Yen in billions) Target: Full-year forecast amount publicly-announced in February 2024
 Maximum: Target + 20% (the payment rate is 150% if the actual profit exceeds the forecast
amount) Threshold: Target - 20% (the payment rate is 0% if the actual profit falls below the forecast
amount) The Compensation Committee may adjust (increase or decrease) the payment rate of the Group-wide
performance-based bonus if it determines that performance, corporate value or brand value have been or
could potentially be significantly impacted by an event (including changes in the external environment)that was not anticipated at the beginning of the period.
<Performance-based bonus (area of responsibility)>
The amount of individual bonuses for Joint Global COO and Representative Executive Officer and SeniorVice Presidents and Executive Officers is Group-wide performance-based bonus plus performance-based
bonus (area of responsibility), which is variable within a range of 0% to 150% of the standard amount,determined according to the individual performance evaluation related to their area of responsibility andfunctions. The ratio of emphasis on Group-wide performance-based bonus and performance-based bonus(area of responsibility) is set at 60:40 in view of the roles and responsibilities Joint Global COO and
Representative Executive Officer and Senior Vice Presidents and Executive Officers bear.
(Recipients: Joint Global COO and Representative Executive Officer, Senior Vice Presidents andExecutive Officers)
Standard amount by position
Bonus payment by individual =(Performance-based bonus(area of responsibility))

Individual performance×

evaluation(0-150%)The individual performance evaluation of Joint Global COO and Representative Executive Officer isbased on the achievement of performance in the area of responsibility as the person in charge of thebusiness. The Compensation Committee determines the final evaluation by comprehensively considering
important initiatives in light of the business environment in the area of responsibility and on their duties.
 The individual performance evaluation of Senior Vice President and Executive Officers is designed toevaluate the efforts and results of each individual, as they play an important role and responsibility inimproving Group-wide functions over the medium to long term as functional managers.
103

(f) Mid- to long-term incentives (stock compensation)<Performance Share Unit (PSU)>
 The Company’s PSU is a plan in which the Company’s common stock, etc. are delivered in a number
calculated based on its consolidated results (ROIC and ROE) at the end of the performance measuring
period (a three-year period). The number of shares, etc. to be delivered to each Executive Officer isdetermined within a range of 0% to 200% of the preset standard number of shares by position. 50% of
the number of shares calculated is paid in cash equivalent to the market value(Recipients: Global CEO and Representative Executive Officer, Joint Global COO and Representative
Executive Officer, Joint Global COO and Executive Officer, Senior Vice Presidents and Executive
Officers)
Number of sharesby individual*=Standard numberof shares by
position*

Evaluation of
consolidated
ROIC(0-200%)

×

×

80%

Evaluation of+ consolidated ROE ×(0-200%)20%

The “standard number of shares by position” above is calculated by dividing the standard amount by position by theCompany’s stock price at the beginning of the performance evaluation period.

<Image of the performance measuring period of the PSU plan by year>
Plan

2022

2022 Plan

2023

2024

Performance measuring period2024 Plan

2026

2027

● Provision of shares/cash

Performance measuring period2023 Plan

2025● Provision of shares/cash

Performance measuring period● Provision ofshares/cash<Target for 2024 Plan>(Evaluation) payment rate

Final year (fiscal year 2026) performance

Threshold:Consolidated
ROIC
Consolidated
ROE

Target: Maximum:

6%

10%

14%

7%

11%

15%

 Target: Figure set as a medium- to long-term target Maximum: Target + 4 points (the payment rate is 200% if the actual performance exceeds thetarget figure) Threshold: Target - 4 points (the payment rate is 0% if the actual performance falls below thetarget figure)<Restricted Stock Unit, etc. (RSU, etc.)>
The number of RSU, etc. of the Company to be granted is determined within a range of 0% to 120% of
the standard amount, according to the evaluation of the efforts related to transformations andsustainability, including ESG, in each fiscal year. Since achievement in those initiatives are reflected in
the corporate value (the Company’s stock price) over the medium- to long-term, vesting of RSU, etc.
shall be at the time of retirement. 50% of the amount to be paid shall be delivered as RSU, and cash
equivalent to the market value of the number of stock units shall be paid at the time of retirement. The
remaining 50% shall be delivered in the form of the Company’s stock (RS), on which transfer restriction
shall be lifted at the time of retirement. In order to ensure objectivity, fairness, and effectiveness as anincentive, the Compensation Committee, composed of Outside Directors, will make the final evaluation
after verifying the appropriateness of self-evaluation of executive side. The number of individual stock
104

units to be provided as RSU and the number of individual shares to be delivered as RS are calculated by
dividing the “Amount of RSU, etc. payments by individual” stated below by the Company’s stock priceat the time of the share unit provision and share delivery.
(Recipients: Global CEO and Representative Executive Officer, Joint Global COO and Representative
Executive Officer, Joint Global COO and Executive Officer, Senior Vice Presidents and Executive
Officers)
Amount of RSU, etc.
payments by individual=Standard amount by position

×

Sustainability evaluation(0-120%)<Image of the sustainability evaluation period and transfer restriction period of the RSU, etc. plan by year>
Plan

2022

2022 Plan

Sustainability
evaluation

2023 Plan

2023



2024

2025

20XX

50%: Provision of RSU
50%: Delivery of RS

Sustainability
evaluation

50%: Provision of RSU
50%: Delivery of RS

Sustainability
evaluation

2024 Plan

...




50%: Provision of RSU
50%: Delivery of RS

Time ofretirement
 Cash payment
 Lifting of thetransfer
restriction
 Cash payment
 Lifting of thetransfer
restriction
 Cash payment
 Lifting of thetransfer
restriction(g) Other important matters<Remuneration of foreign Executive Officers> Notwithstanding the provisions set forth in (b) through (e) above, the remuneration, etc. of foreign
Executive Officers shall be determined individually, based on “(a) Principles of remuneration,” taking
into consideration the remuneration levels and practices in the human resources market that are assumed
in light of their place of residence. However, in light of their responsibilities for the entire Group as an
Executive Officer of the Company, the same structure as other Executive Officers will be applied to themwith respect to “(f) Mid- to long-term incentives (stock compensation).”<Process for deciding individual remuneration> The details of individual remunerations to the Company’s Members of the Board and Executive Officers
are determined by the Compensation Committee, composed solely of Independent Outside Directors, inaccordance with the policy for setting Board Members’ and Executive Officers’ remuneration. If any
Members of the Board or Executive Officers of the Company hold concurrent positions as executives forany subsidiaries, the Compensation Committee also deliberates on the remuneration to be paid by thosesubsidiaries. The main roles and powers of the Compensation Committee are as follows.
<Main roles and powers of the Compensation Committee>
Matters for resolution

Matters for deliberation

 Policy for setting Board Members’ and Executive
Officers’ remuneration

 Details of remuneration for individual Members of theBoard and Executive Officers based on the
aforementioned policy In the event that Member of the Board or Executive
Officer is concurrently an executive of a Group
company, the remuneration paid by such Group company
 Remuneration paid by Group companies for the Chair,
CEO and COO of key overseas Group companies Report on the status of execution of duties by theCompensation Committee reported to Members of theBoard(h) Reference: Statement pertaining to performance-related remuneration as prescribed in Article 34,
paragraph (1), item (iii) of the Corporation Tax Act
Group-wide performance-based bonus and Performance Share Unit (PSU) for the Company’s Executive
Officers are designed as performance-related remuneration as prescribed in Article 34, paragraph (1),item (iii) of the Corporation Tax Act in order to allow the full amount to be treated as a deductible expense.
The calculation method for these is determined by a resolution of the Compensation Committee,
composed solely of Independent Outside Directors. The details of the calculation method are as follows.
105

A. Group-wide performance-based bonus for fiscal year 2024
The individual amount of Group-wide performance-based bonus is to be calculated by position anddetermined in accordance with the following calculation method at the first meeting of the Compensation
Committee following the finalization of the consolidated financial statements for the fiscal year ending
December 31, 2024. The performance indicator used as the basis for calculating the pay amount is
consolidated adjusted operating profit, and the performance measuring period for this indicator is fromJanuary 1, 2024 to December 31, 2024.
(A) Calculation method
Amount of payment by individual = Standard amount by position(*1) × Payment rate(*2)*1 Standard amounts by position are as follows:
PositionStandard amount by position(per person)

Global CEO and Representative
Executive Officer
83.23 million yen

Joint Global COO and
Representative Executive
Officer
38.59 million yen

Senior Vice President andExecutive Officer
22.46 million yen*2 The payment rate is calculated by the following formula, and any fraction after the decimal point resulting fromthe calculation is rounded off to the first decimal place.
Consolidated adjusted operating
Between 424.0 billion yen andprofitLess than 424.0 billion yen
636.0 billion yen(fiscal year 2024 results)
50% + {100% × (Consolidated
adjusted operating profit - 424.00%billion yen) ÷ 212.0 billion
yen}

Payment rate

636.0 billion yen or more

150%(B) Upper limit for payment by individual
Position
Upper limit for payment by
individual(*3)

Global CEO and Representative
Executive Officer
124.85 million yen

Joint Global COO and
Representative Executive
Officer
57.89 million yen

Senior Vice President andExecutive Officer
33.69 million yen*3 The upper limit for payment by individual is the “defined amount” prescribed in Article 34, paragraph (1), item(iii) (a) 1. of the Corporation Tax Act.

(C) Timing of payment
Payments will be made in a lump sum in March following the end of the performance measuring
period, based on the payment amounts by individual calculated using the above calculation method.
B. PSU 2024 Plan (performance measuring period: 2024 to 2026)
The number of shares of the Company’s common stock to be delivered as PSU (“Number of PSU Shares
to Be Delivered”) and the amount of money to be paid (“Amount of PSU Cash to Be Paid”) to eachindividual will be calculated and determined in accordance with the following calculation method at thefirst meeting of the Compensation Committee following the finalization of the consolidated financial
statements for the fiscal year ending December 31, 2026.
(A) Overview of the Company’s PSU
The Company determines the Number of PSU Shares to Be Delivered and the Amount of PSU Cashto Be Paid to each Executive Officer according to the results of performance indicators (actual
results) during a predetermined performance measuring period. The performance indicators used as
the basis for calculating the Number of PSU Shares to Be Delivered and the Amount of PSU Cashto Be Paid under the 2024 Plan are consolidated ROIC and consolidated ROE, and the performancemeasuring period for these indicators is from January 1, 2024 to December 31, 2026.
The Company shall pay “monetary compensation claims to provide in-kind contributions” to each
Executive Officer in order to deliver shares of the Company’s common stock to each Executive
Officer. The amount of such monetary compensation claims is determined by the Compensation
Committee to the extent that is not particularly favorable to each Executive Officer subscribing to
the Company’s common stock.
106

The Company will deliver shares of common stock of the Company to each Executive Officer by
issuing new shares or disposing of treasury stock. Each Executive Officer shall be granted theCompany’s common stock by making in-kind contribution to the Company of the aforementioned
monetary compensation claims to provide in-kind contributions.
(B) Calculation method
The Number of PSU Shares to Be Delivered and the Amount of PSU Cash to Be Paid by individual
are calculated and determined by position as follows. Any fraction of less than 100 shares in the
Number of PSU Shares to Be Delivered and any fraction of less than 10,000 yen in the Amount of
PSU Cash to Be Paid shall be rounded up to 100 shares and 10,000 yen, respectively.
 Number of PSU Shares to Be Delivered = Standard number of shares by position(*1) × 50% ×Payment rate(*2)
 Amount of PSU Cash to Be Paid = Standard number of shares by position(*1) × 50% × Payment
rate(*2) × the Company’s stock price(*3)*1 Standard number of shares by position is as follows: In the period between the determination of this calculation
method by the Compensation Committee and the determination by the Compensation Committee of the Numberof PSU Shares to Be Delivered and the Amount of PSU Cash to Be Paid to each Executive Officer according to
the results of the performance indicators, if the total number of shares issued by the Company changes due toconsolidation of stock or stock split (including a free distribution of the Company’s stock; the same definition
applies to stock splits described below), the below standard number of shares by position shall be adjusted by

Position

multiplying the ratio of such consolidation of stock or stock split, and the number of shares after the adjustment
will be used in the calculation.
Global CEO and
Joint Global COO and
Joint Global COO and
Senior Vice President
Representative Executive Representative Executive
Executive Officer
and Executive Officer
Officer
OfficerStandard number ofshares by position(per person)

9,800 shares

7,600 shares

7,600 shares

3,000 shares*2 The payment rate is calculated by the following formula, and any fraction after the decimal point resulting fromthe calculation is rounded off to the first decimal place.
・ Payment rate = Payment rate A(*a) × 0.8 + Payment rate B(*b) × 0.2*a The payment rate A is calculated by the following formula based on consolidated ROIC results (%) for fiscal
year 2026, and any fraction after the decimal point resulting from the calculation is rounded off to the firstdecimal place.
Consolidated ROIC
results(%, fiscal year 2026)

Less than 6%

From 6% to 10%
50% + {50% ×0% (Consolidated ROIC
results(%) - 6%) ÷ 4%}

Payment rate A

From 10% to 14%

14% or more

100% + {100% ×(Consolidated ROIC
results(%) - 10%) ÷ 4%}200%*b The payment rate B is calculated by the following formula based on consolidated ROE results (%) for fiscal
year 2026, and any fraction after the decimal point resulting from the calculation is rounded off to the firstdecimal place.
Consolidated ROE
results(%, fiscal year 2026)
Payment rate B

Less than 7%

From 7% to 11%
50% + {50% ×0% (Consolidated ROE
results(%) - 7%) ÷ 4%}

From 11% to 15%
100% + {100% ×(Consolidated ROE
results(%) - 11%) ÷ 4%}

15% or more

200%

*3 The Company’s stock price uses the daily average closing price of the Company’s stock on the Tokyo Stock
Exchange for the month preceding the day of the resolution made by the Company’s Board of Directors
concerning the new issuance of common stock of the Company or disposal of treasury stock for delivery
according to this plan, following the performance measuring period.

107

(C) Maximum Number of PSU Shares to Be Delivered and maximum Amount of PSU Cash to Be Paidto each individual
Position(*4)
Maximum Number of PSU
Shares to Be Delivered(*5)
Maximum Amount of PSU Cashto Be Paid(*5)

Global CEO and
Representative
Executive Officer

Joint Global COO and
Representative
Executive Officer

Joint Global COO and
Executive Officer

Senior Vice President
and Executive Officer

9,800 shares

7,600 shares

7,600 shares

3,000 shares

77.41 million yen

60.03 million yen

60.03 million yen

23.70 million yen*4 Positions are based on the position held by each Executive Officer immediately following the conclusion of theAnnual Shareholders’ Meeting for the fiscal year preceding the beginning of the performance measuring period(fiscal year 2023).
*5 The “maximum Number of PSU Shares to Be Delivered” and “maximum Amount of PSU Cash to Be Paid” arerespectively the “defined number” and “defined amount” as prescribed in Article 34, paragraph (1), item (iii) (a)1. of the Corporation Tax Act.

(D) Conditions for delivery and payment
The Company shall deliver and pay in May 2027 to each Executive Officer who meets the following
three conditions, shares of the Company’s stock and cash equivalent to the Number of PSU Shares
to Be Delivered and the Amount of PSU Cash to Be Paid to each individual calculated based on theabove calculation method.
 Hold a position of Executive Officer of the Company during the period from the day of the Annual
Shareholders’ Meeting convened on March 26, 2024 until the day of the Annual Shareholders’Meeting scheduled to be convened in March 2027 (hereafter “Relevant Period”), and during theperformance measuring period corresponding to the Relevant Period.
 No engagement in illegal acts (criminal conduct related to professional duties, breach of trust
against the Company, and acts that incur serious disciplinary measures or require censure).
 Other matters that the Company’s Compensation Committee and its Board for Directors deems asnecessary to be achieved for the stock compensation plan
Treatment if an Executive Officer changes roles during the Relevant Period(E) If a person becomes an Executive Officer or is promoted or demoted, or otherwise subject to a change
in position during the Relevant Period, the standard number of shares by position for such person
shall be the number calculated with the following formula.
 Standard number of shares by position of the person who changes roles = Standard number ofshares by position prior to the change of roles(*6) + (Standard number of shares by position after
the change of roles - Standard number of shares by position prior to the change of roles(*6)) ×
Number of months after the change of roles in Relevant Period(*7) ÷ 36
*6 In the event of assuming office as a new Executive Officer, calculated with the “Standard number of shares by
position prior to the change of roles” set at 0.
*7 Fractions of less than one month are to be rounded up to one full month.

Similarly, the maximum Number of PSU Shares to Be Delivered and the maximum Amount of PSU
Cash to Be Paid will be proportionally divided according to the position prior to and after the changeof roles and the number of months after the change of roles.
 If a person retires as an Executive Officer during the Relevant Period, the standard number ofshares by position for such person shall be the number calculated with the following formula.
 Standard number of shares by position of the person who retires = Standard number of shares by
position during tenure(*8) × Number of months in office in Relevant Period(*9) ÷ 36
*8 In the event of promotion, demotion, or change in position during the term of office of an Executive Officer, thestandard number of shares by position shall be calculated in accordance with the treatment in (E) above.
*9 Fractions of less than one month are to be rounded up to one full month.

(F) If an Executive Officer retires during the Relevant Period and all mandate or employment
relationship with the Company is terminated, the Company will provide a cash payment equivalent
to the Amount of PSU Cash to Be Paid in lieu of the delivery of shares of the Company’s stock
equivalent to the Number of PSU Shares to Be Delivered. That is, regardless of the calculation108

method stated in (B) above, the total amount of cash to be paid in PSU will be calculated based on
the following calculation method and will be paid upon retirement if the conditions for delivery andpayment set forth in (D) above are met. The maximum amount of cash to be paid in PSU shall be an
amount equal to twice the “maximum Amount of PSU Cash to Be Paid” set forth in (C) above. Any
fraction of less than 10,000 yen in the Amount of PSU Cash to Be Paid shall be rounded up.
 Amount of PSU Cash to Be Paid = Standard number of shares by position of the retiring officer
× Payment rate (*10) × Price of Company shares (*11)*10 The payment rate is determined on a case-by-case basis by the Compensation Committee.
*11 The Company’s share price shall be the average closing price of the Company’s stock on the Tokyo Stock
Exchange for the month preceding the month of the date of retirement.

If an Executive Officer retires during the Relevant Period and continues to hold a position other than
Executive Officer until the end of the Relevant Period, the calculation method for the Number of
PSU Shares to Be Delivered and the Amount of PSU Cash to Be Paid, and the timing of delivery ofshares of the Company’s stock and cash equivalent thereto shall be in accordance with the provisionsof (A) through (F) above, as with other incumbent Executive Officers.
Treatment if there is a restructuring of the organization or abolition of the PSU during the Relevant
Period(G) If, during the Relevant Period, a resolution concerning a merger with the Company being the nonsurviving company, a company split with compensation for the split granted to the Company’s
shareholders, a share exchange or share transfer whereby the Company becomes a wholly-owned
subsidiary, the consolidation of stock for only the fractions held by Eligible Executive Officers, theacquisition of shares or sale of shares pursuant to whole acquisition clause is approved at the
Shareholders’ Meeting (or at the Board of Directors, if not convened) and becomes effective or if theabolition of the PSU is approved by the Company’s Compensation Committee and becomes effective,
regardless of the calculation method stated in (B) above, the Company shall pay cash in the amountobtained by multiplying the number of months from the first month of the Relevant Period to themonth in which such approval was made divided by 36 by the standard number of shares by
position(*12) for each Executive Officer on the day of such approval, the payment rate(*13) calculated
at the time of such approval, and the daily average closing price of the Company’s stock on theTokyo Stock Exchange for the month preceding the day of such approval, as long as the conditions
for delivery and payment prescribed in (D) above are reached. The maximum amount of cash to be
paid in PSU shall be an amount equal to twice the “maximum Amount of PSU Cash to Be Paid” set
forth in (C) above. Any fraction of less than 10,000 yen in the amount of cash paid shall be roundedup.
*12 If (E) or (F) above applies to an Executive Officer (in the case of a retired Executive Officer, only if he/she
continues to hold a position other than Executive Officer at the Company after retirement until the date of
approval), the result based on the calculation method described in (E) or (F) above shall be applied as the standard
number of shares by position of such Executive Officer.
*13 The payment rate is calculated according to the method described in (B)*2 above, but the consolidated ROIC
results (%) and consolidated ROE results (%), which are the basis for the calculation, shall be the results for themost recent fiscal year listed in the Annual Securities Report filed by the date of such approval instead of theresults for fiscal year 2026.

109

(5) Stock holdings
1)Standards and approach for classification of investment stocks

The Company distinguishes between investment stocks for pure investment purposes—shares held for gaining
profit through changes in share value and dividends—and strategic shareholdings, which are all other shares
held in accordance with the Company shareholding policy. The Company does not hold any investment stocks
for pure investment purposes.
2)

Investment stocks held for purposes other than pure investmenta. Shareholding policy and method for verifying appropriateness for holding as well as details regarding
verification of the appropriateness of holding shares for each individual security performed by the Boardof Directors and other parties(a) Shareholding policy for strategic shareholdings
The Company defines strategic shareholdings as holdings that contribute toward increased corporate
value of the Company and are held out of necessity from the Company’s business strategy perspective
or with the goal of maintaining or strengthening relationships with businesses or collaborative
industries. The Company will not hold strategic shareholdings for reasons outside of this definition.
(b) Verifying appropriateness of strategic shareholdings
The Company confirms the appropriateness of its holdings on an annual basis, including an assessmentof securities for which there are holdings, number of shares held, holding ratios, and other factors.
These assessments are then verified by the Board of Directors. Appropriateness of holding iscomprehensively determined by operating divisions involved in business execution in accordance withthe shareholding policy of the Company, taking into account a quantitative evaluation of the economic
rationale corresponding to the cost of capital and other relevant factors for each individual stock holding.
Shareholdings that are not judged as appropriate based on the results of this verification process are
reduced after establishing a dialogue and gaining the understanding of the business partner for theholding in question. As a result, the number of strategic shareholdings is decreased year on year.
b. Number of securities and balance sheet amounts
Number of
securities

Balance sheet amounts (Yen in
millions)

Unlisted shares

40

1,462

Shares other than unlisted
shares29

48,434(Securities for which the number of shares increased during the current fiscal year)
Total acquisition cost for the
Number ofincrease in the number of shares
securities(Yen in millions)
Unlisted shares
Shares other than unlisted
sharesReason for increasing number of shares

–

–

–

–

–

–

110

(Securities for which the number of shares decreased during the current fiscal year)

Unlisted shares

Number of
securities

Total sale value related to thedecrease in the number ofshares (Yen in millions)––Shares other than unlisted
427,017
shares(Note) Decrease or increase in the number of shares of the above securities does not include changes due toconsolidation of stock, stock splits, stock transfers, stock exchanges, mergers, and others.

111

c. Information on the number of specific investment stocks and deemed shareholdings by security, and theamount recorded on the balance sheet
Specific Investments Stocks
Current fiscal year

Previous fiscal year

Purpose of holding, overview of businessalliances, etc., quantitative effect of holding(Note 1) and reasons for the increase in the
Balance sheet amount Balance sheet amountnumber of shares(Yen in millions)(Yen in millions)
Number of shares

Number of shares

Toyota Motor

9,799,450

9,799,450

Corporation

25,385

17,7625,000,000

5,000,000

11,8007,485

Sumitomo Mitsui
Financial Group, Inc.

281,112562,224

1,934

Otsuka Holdings Co.,
Ltd.
FUJI KYUKO CO.,Name

Maintain/strengthen business andcollaborative relationships in the premium

Ownership of
the Company’s
sharesYestire business
Maintain/strengthen business alliances(manufacturing domain, etc.)

Yes

Yes

2,978

Business strategy through financialtransactions

200,000

200,000

Maintain/strengthen business and

1,058

861

244,510244,510

1,032

1,169

527,076

527,076930

946

collaborative relationships in the premium
tire business

391,229391,229

Maintain/strengthen business andcollaborative relationships in the solutions

836

459

Fukuyama
Transporting Co., Ltd.

200,162

200,162812

613

Idemitsu Kosan Co.,Ltd.

856,000

171,200

657

526

Kintetsu Group
Holdings Co., Ltd.

124,281

124,281556

541

Nishi-Nippon

212,237

212,237507

524

313,632

313,632489

453

collaborative relationships in the premium
tire business

366,888366,888

Holdings Co., Ltd.

Maintain/strengthen business andcollaborative relationships in the solutions

419

354

Niigata kotsu Co.,Ltd.

163,870

163,870

336

339

Toyo Tire Corporation

LTD.

Yellow Hat Ltd.

Seino Holdings Co.,
Ltd.

(Note 2)

Railroad Co., Ltd.
AUTOBACS SEVEN
Co., Ltd.
SENKO Group

112

collaborative relationships in the solutions
business

No

Maintain/strengthen business andcollaborative relationships in the solutions
business

No

Maintain/strengthen business andYesNobusiness
Maintain/strengthen business andcollaborative relationships in the solutions

Nobusiness
Maintain/strengthen business andcollaborative relationships in the premiumNotire business
Maintain/strengthen business andcollaborative relationships in the solutions
business

No

Maintain/strengthen business andcollaborative relationships in the solutions
business

No

Maintain/strengthen business andNoNobusiness
Maintain/strengthen business andcollaborative relationships in the solutions
business

NoCurrent fiscal year

Previous fiscal year

Purpose of holding, overview of businessalliances, etc., quantitative effect of holding(Note 1) and reasons for the increase in thenumber of shares
Balance sheet amount Balance sheet amount(Yen in millions)(Yen in millions)
Number of shares

Number of shares

270,970

270,970

293

318

51,51451,514267

249

Hankyu Hanshin

57,98357,983

Holdings, Inc.

260

227

collaborative relationships in the solutions
business

153,550

153,550

Maintain/strengthen business andcollaborative relationships in the premium

247

192

ITOCHU ENEX CO.,LTD.

101,386

101,386

156

106

Hiroshima Electric
Railway Co., Ltd.

120,000

120,000

92

98

Central Japan Railway

25,000

5,000

90

81

121,536

121,53673

59

50,00050,00046

45collaborative relationships in the premium
tire business

42,00042,000

Maintain/strengthen business andcollaborative relationships in the solutions

45

34

SAKAI HEAVY
INDUSTRIES, LTD.

5,808

5,808

35

20

S LINE GROUP CO.,LTD.

29,70029,70026

24

12,10012,10021

15

10,00010,000

19

15

5,000

5,000

13

11

Name

ISEKI & CO., LTD.

Sankyu Inc.

SAN-AI OBBLI CO.,LTD.

Company(Note 3)Mie Kotsu Group
Holdings, Inc.

Nissin Shoji Co., Ltd.
Daiwa Motor
Transportation Co.,
Ltd.

(Note 4)KAMEICORPORATION

AIR WATER INC.

ORIX
CORPORATION

113

Ownership of
the Company’s
shares

Maintain/strengthen business andcollaborative relationships in the premium
tire business

Yes

Maintain/strengthen business andcollaborative relationships in the solutions
business

No

Maintain/strengthen business andNoNotire business
Maintain/strengthen business andcollaborative relationships in the premiumNotire business
Maintain/strengthen business andcollaborative relationships in the solutions

Nobusiness
Maintain/strengthen business andcollaborative relationships in the solutions
business

No

Maintain/strengthen business andcollaborative relationships in the solutions
business

No

Maintain/strengthen business andNoNobusiness
Maintain/strengthen business andcollaborative relationships in the premiumNotire business
Maintain/strengthen business andcollaborative relationships in the solutions

Nobusiness
Maintain/strengthen business andcollaborative relationships in the premium
tire business

No

Maintain/strengthen business andcollaborative relationships in the solutions
business

No

Maintain/strengthen business andcollaborative relationships in the premium
tire businessNo

Current fiscal year

Previous fiscal year

Purpose of holding, overview of businessalliances, etc., quantitative effect of holding(Note 1) and reasons for the increase in thenumber of shares
Balance sheet amount Balance sheet amount(Yen in millions)(Yen in millions)
Number of shares

Number of shares

JSR Corporation(Note 5)–

6,325,160–

16,370Nokian Tyres PLC–

4,167,653(Note 5)–

5,743

Inoue Rubber–

597,100(Thailand) Public Co.,
Ltd.

–

32

Name

Ownership of
the Company’s
shares

–

No

–

No

–

No

(Note 5)(Notes) 1. Although the quantitative effect of holding shares for each security is not published for the purpose of business
confidentiality, the appropriateness of each individual holding is comprehensively determined by operating divisions
involved in business execution in accordance with the shareholding policy of the Company, taking into account aquantitative evaluation of the economic rationale corresponding to the cost of capital and other relevant factors, and isthen verified by the Board of Directors.
2. On January 1, 2024, Idemitsu Kosan Co., Ltd. carried out a stock split of common stock at a five for one ratio. The
number of shares stated constitutes the number of shares subsequent to the stock split.
3. On October 1, 2023, Central Japan Railway Company carried out a stock split of common stock at a five for one ratio.
4. S LINE CO., LTD. changed its name to S LINE GROUP CO., LTD. effective July 1, 2023.
5. A dash (“-”) signifies that there are no holdings for the security in question.

Deemed Shareholdings
No item to report.
3)

Investment stocks for pure investment purposes
No item to report.

4)

Investment stocks for which the purpose of holding was changed from pure investment purposes during
the current fiscal year
No item to report.

114

V. Financial Information
1. Method for preparation of the consolidated financial statements and the non-consolidated financial
statements(1) The consolidated financial statements of the Company have been prepared in accordance with
International Financial Reporting Standards (“IFRS”) pursuant to the provisions of Article 93 of theRegulation on Terminology, Forms, and Preparation Methods of Consolidated Financial Statements(Ministry of Finance Order No. 28 of 1976; the “Regulation on Consolidated Financial Statements”).
(2) The non-consolidated financial statements of the Company have been prepared in accordance with theRegulation on Terminology, Forms, and Preparation Methods of Financial Statements (Ministry of
Finance Order No. 59 of 1963; the “Regulation on Financial Statements”).
The Company is allowed to file specified financial statements under the Financial Instruments andExchange Act and prepares non-consolidated financial statements pursuant to Article 127 of theRegulation on Financial Statements.
2. Audit certification
The consolidated financial statements and the non-consolidated financial statements for the fiscal year fromJanuary 1, 2023 to December 31, 2023 were audited by KPMG AZSA LLC in accordance with Article 1932, paragraph (1) of the Financial Instruments and Exchange Act.
3. Special effort to ensure the appropriateness of consolidated financial statements, etc., and development of asystem for preparing consolidated financial statements, etc. appropriately in accordance with IFRSThe Company makes special effort to ensure the appropriateness of the consolidated financial statements,
etc., and develop a system for preparing consolidated financial statements, etc. appropriately in accordancewith IFRS. The details are as follows:(1) In order to develop a system that ensures a proper understanding of the contents of accounting
standards, etc. and apply them to the consolidated financial statements, etc., the Company joins the
Financial Accounting Standards Foundation to gather information, and attends various seminars hosted
by said Foundation.
(2) In addition, the Company develops the Group’s accounting policy in accordance with IFRS andpractices accounting procedures based on the policy to appropriately prepare the consolidated financial
statements in accordance with IFRS. The Company obtains press releases and standards published by
the International Accounting Standards Board as needed, understands the latest standards and weighs
their implications to the Company, and updates the Group’s accounting policy in a timely manner.

115

1. Consolidated Financial Statements, etc.
(1) Consolidated Financial Statements
1) Consolidated Statement of Financial Position
Note

Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Yen in millions

Yen in millions

AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other financial assets
Other current assets

8,20
9,35
10
11,35
12

518,905
946,608
885,305
15,107118,031724,601
952,307868,578
10,792138,063

Subtotal
Assets held for sale13

2,483,956
28,694

2,694,341
3,093

2,512,650

2,697,434

1,556,665

1,738,506

301,278
136,406
159,920

319,135
149,990
200,858

38,894

41,183

104,50982,01069,871

131,210
88,141
61,3572,449,553

2,730,379

4,962,203

5,427,813

Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Goodwill
Intangible assets
Investments accounted for using
equity method
Other financial assets
Deferred tax assets
Other non-current assets

14,16,
20
17
15,16
15,16

11,35
2,18
12,23

Total non-current assets
Total

116

Note
Liabilities and equity
Liabilities
Current liabilities
Trade and other payables
Bonds and borrowings
Lease liabilities
Income taxes payable
Other financial liabilities
Provisions
Other current liabilities

Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Yen in millions

Yen in millions

607,498
107,866
56,03353,78034,074
51,615
173,340599,240
258,074
61,30891,12449,65935,489168,858

1,084,204

1,263,753

1,596

1,058

1,085,800

1,264,811

345,584
257,684
18,075
155,11237,302
39,053
11,092

239,789
270,989
9,901
153,51140,25530,946
12,217

Total non-current liabilities

863,901

757,608

Total liabilities
EquityCommon stock
Capital surplus
Treasury stock
Other components of equity
Retained earnings

1,949,701

2,022,419

126,354
119,517(136,814)
358,523
2,498,255

126,354
120,300(135,409)
531,127
2,711,220

2,965,835

3,353,592

Subtotal
Liabilities directly associatedwith assets held for sale
Total current liabilities
Non-current liabilities
Bonds and borrowings
Lease liabilities
Other financial liabilities
Retirement benefit liabilities
Provisions
Deferred tax liabilities
Other non-current liabilities

Total equity attributable to ownersof parent
Non-controlling interests

19,35
20,35
20,35
20,35
21
22
13

20,35
20,35
20,35
23
21
2,18

24
24
24
24
2,24

2

Total equity
Total liabilities and equity

117

46,66651,803

3,012,501

3,405,394

4,962,203

5,427,813

2) Consolidated Statement of Profit or Loss and Consolidated Statement of Comprehensive Income
Consolidated Statement of Profit or Loss
Note
Continuing operations
Revenue
Cost of sales

Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)

Yen in millions

Yen in millions

6,26
10,14,
15,17,
23

4,110,070

4,313,800

2,516,821

2,661,228

1,593,249

1,652,573

1,158,523

1,181,482

39,11139,19332,53828,509441,298
18,28341,898

481,775
35,38578,346

5,775

5,341

423,458
112,513444,154
111,177

310,945

332,977(5,141)

4,375

305,804

337,352

300,305
5,499

331,305
6,048

305,804

337,35232
32

439.60(7.40)

477.606.39

32432.20483.9932
32

439.00(7.39)

477.026.38

32431.61483.41Gross profit
Selling, general and administrative
expenses
Other income
Other expenses
Operating profit
Finance income
Finance costs
Share of profit (loss) of investments
accounted for using equity method
Profit before tax
Income tax expense

14,15,
17,23,
27,34
6,28
6,16,
23,28
29
23,29

2,18

Profit from continuing operations
Discontinued operations
Profit (loss) from discontinued
operations

14,15,
16,17,
23,31

ProfitProfit attributable to
Owners of parent
Non-controlling interests
ProfitEarnings (loss) per share
Basic earnings (loss) per share (Yen)Continuing operations
Discontinued operations
Total
Diluted earnings (loss) per share (Yen)Continuing operations
Discontinued operations
Total

118

Consolidated Statement of Comprehensive Income
Note

Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)

Yen in millions
305,804

Yen in millions
337,352(19,733)

12,693

8,057(8,367)(0)(2)(11,677)

4,324

30

258,117

184,445

30

2,704

(999)

30

10,2201,282

Total of items that may be reclassified to
profit or loss

271,041

184,728

Other comprehensive income, net of tax

259,364

189,051

Comprehensive income

565,168

526,404

Comprehensive income attributable to
Owners of parent
Non-controlling interests

556,730
8,438

516,150
10,253Comprehensive income

565,168

526,404

ProfitOther comprehensive income
Items that will not be reclassified to
profit or loss
Net change in fair value of financial
assets measured through other
30,35
comprehensive income
Remeasurements of defined benefit
23,30
plans
Share of other comprehensive
income of investments accounted for 30
using equity method
Total of items that will not bereclassified to profit or loss
Items that may be reclassified to profit
or loss
Exchange differences on translationof foreign operations
Effective portion of change in fairvalue of cash flow hedges
Share of other comprehensive
income of investments accounted forusing equity method

1193) Consolidated Statement of Changes in Equity
Previous fiscal year (Year ended December 31, 2022)
Equity attributable to owners of parent
Other components of equity

Note

Balance as of January 1, 2022
Cumulative effects of changes inaccounting policies
Restated balance as of January 1,
2022
ProfitOther comprehensive income

2

Total comprehensive income
Purchase of treasury stock
Disposal of treasury stock
Dividends
Changes in ownership interests ofowners in subsidiaries undercontrol
Transfer from other components ofequity to retained earnings
Transactions with non-controllinginterests and other
Other changes
Total transactions with owners, etc.
Balance as of December 31, 2022

24
24
25

35

Commonstock

CapitalsurplusTreasury
stock

Stock
acquisitionrightsExchangedifferencesontranslationof foreign
operations

Effective
portion ofchange infair value ofcash flow
hedgesNet change
in fair valueof financial
assetsmeasuredthroughothercomprehensi
ve incomeYen inmillions
126,354

Yen inmillions
122,126

Yen inmillions(38,123)

Yen inmillions
2,997

Yen inmillions
44,682

Yen inmillions
744

Yen inmillions
63,436

–

–

–

–

–

–

–

126,354

122,126(38,123)

2,997

44,682744

63,436

–
–

–
–

–
–

–
–

–
265,629–
2,237–(19,734)

–

–

–

–

265,629

2,237(19,734)

–
–
–

–
–
–

(100,033)
1,343
–

–
(324)
–

–
–
–

–
–
–

–
–
–

–

(303)

–

–

–

–

–

–

–

–

–

–

–

(1,144)–(2,306)

–

–

–

–

–

–

–

–

–

–

–

–

–

(2,609)(98,690)

(324)

–

–

(1,144)

126,354

119,517(136,814)

2,673

310,3112,980

42,558120

Equity attributable to owners of parent
Other components of equity
Note

Balance as of January 1, 2022
Cumulative effects of changes inaccounting policies
Restated balance as of January 1,
2022
ProfitOther comprehensive income

2

Total comprehensive income
Purchase of treasury stock
Disposal of treasury stock
Dividends
Changes in ownership interests ofowners in subsidiaries undercontrol
Transfer from other components ofequity to retained earnings
Transactions with non-controllinginterests and other
Other changes

24
24
25

35

Total

Noncontrollinginterests

Total

Yen inmillions
2,307,667

Yen inmillions
2,629,883

Yen inmillions
45,471

Yen inmillions
2,675,354

–

91

91

13

105

–

111,859

2,307,758

2,629,974

45,484

2,675,458

–
8,293

–
256,425

300,305–

300,305
256,425

5,499
2,939

305,804
259,364

8,293

256,425

300,305

556,730

8,438

565,168

–
–
–

–
(324)
–

(5)
(198)
(119,042)(100,038)
820(119,042)––(4,709)(100,038)
820(123,751)

–

–

–

(303)

(1,708)(2,012)(8,293)(9,437)

9,437

–

–

–

–

–

–

(2,306)–(2,306)

Remeasurements ofdefinedbenefit plans

Total

Retainedearnings

Yen inmillions–

Yen inmillions
111,859

–

–

–

–

–

(839)

(839)

Total transactions with owners, etc.

(8,293)(9,762)(109,808)(220,869)(7,256)(228,125)

Balance as of December 31, 2022–

358,523

2,498,255

2,965,835

46,666

3,012,501

121

Current fiscal year (Year ended December 31, 2023)
Equity attributable to owners of parent
Other components of equity

Note

Balance as of January 1, 2023
ProfitOther comprehensive income
Total comprehensive income
Purchase of treasury stock
Disposal of treasury stock
Dividends
Changes in ownership interests ofowners in subsidiaries undercontrol
Transfer from other components ofequity to retained earnings
Other changes

24
24
25

Total transactions with owners, etc.
Balance as of December 31, 2023

Commonstock

CapitalsurplusTreasury
stock

Stock
acquisitionrightsExchangedifferencesontranslationof foreign
operations

Effective
portion ofchange infair value ofcash flow
hedgesNet change
in fair valueof financial
assetsmeasuredthroughothercomprehensi
ve incomeYen inmillions
126,354––

Yen inmillions
119,517––

Yen inmillions(136,814)––

Yen inmillions
2,673––

Yen inmillions
310,311–
183,178

Yen inmillions
2,980–(1,886)

Yen inmillions
42,558–
12,690––––183,178(1,886)

12,690

–
–
–

–
–
–

(16)
1,420
–

–
(365)
–

–
–
–

–
–
–

–
–
–

–

783

–

–

–

–

–

–

–

–

–

–

–

(21,013)

–

–

–

–

–

–

–

–

783

1,405

(365)

–

–

(21,013)

126,354

120,300(135,409)

2,308

493,489

1,094

34,236Equity attributable to owners of parent
Other components of equity
Note

Balance as of January 1, 2023
ProfitOther comprehensive income
Total comprehensive income
Purchase of treasury stock
Disposal of treasury stock
Dividends
Changes in ownership interests ofowners in subsidiaries undercontrol
Transfer from other components ofequity to retained earnings
Other changes
Total transactions with owners, etc.
Balance as of December 31, 2023

24
24
25

Total

Noncontrollinginterests

Total

Yen inmillions
2,498,255
331,305–

Yen inmillions
2,965,835
331,305
184,845

Yen inmillions
46,666
6,048
4,206

Yen inmillions
3,012,501
337,352
189,051

184,845

331,305

516,150

10,253

526,404

–
–
–

–
(365)
–

(1)
(162)
(130,053)(17)
893(130,053)––(3,940)(17)893(133,994)

–

–

–

783

(1,228)

(445)

9,136

(11,876)

11,876–––

Remeasurements ofdefinedbenefit plans

Total

Retainedearnings

Yen inmillions––(9,136)

Yen inmillions
358,523–
184,845(9,136)

–

–

–

–

51

51

9,136

(12,242)(118,340)(128,394)(5,117)(133,511)–

531,127

2,711,220

3,353,592

51,803

3,405,394

1224) Consolidated Statement of Cash Flows
Note

Previous fiscal year
Current fiscal year
(Year ended December 31, 2022) (Year ended December 31, 2023)
Yen in millions

Cash flows from operating activities
Profit before tax
Profit (loss) before tax from discontinued operations
31
Depreciation and amortization
Impairment losses
Increase (decrease) in accounts payable - bonuses
Increase (decrease) in retirement benefit liabilities
Interest and dividend income
Interest expenses
Foreign currency exchange loss (gain)
Share of loss (profit) of investments accounted forusing equity method
Loss (gain) on sale of fixed assets
Business and plant restructuring income
Business and plant restructuring expenses
Loss on retirement of fixed assets
Decrease (increase) in trade and other receivables
Decrease (increase) in inventories
Increase (decrease) in trade and other payables
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for loss on litigation
Increase (decrease) in provision for productwarranties
Other

Yen in millions

423,458(24,815)
282,108
18,216(1,349)(22,008)(18,679)
14,858(3,894)444,154
5,340
305,805
1,833(10,845)(9,959)(31,079)
21,03819,346(5,775)(5,341)(14,296)(4,942)7,435
2,625(139,608)(195,404)
52,515(3,462)(1,453)(17,322)(8,645)
13,3903,22556,80785,319(55,279)
6,519(7,047)

15,427(7,682)(32,640)(106,865)

SubtotalInterest and dividends received
Interest paid
Income taxes paid

348,317
20,898(14,570)(86,162)

702,71234,461(17,757)(57,982)

Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments for purchase of property, plant andequipment
Proceeds from sale of property, plant and equipment
Payments for purchase of intangible assets
Payments for purchase of investment securities
Proceeds from sale of investment securities
Payments of long-term loans receivableCollection of loans receivable
Payments for sale of discontinued operations
Other

268,483

661,433(221,293)(282,449)

27,685(33,433)(3,719)2,856(28,943)
19,494(115,720)
15,06829,609(60,488)(2,203)27,923(21,122)
14,891–(3,880)(338,004)(297,719)

Net cash provided by (used in) investing activities

123

Note

Cash flows from financing activities
Increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Redemption of bonds
Repayments of lease liabilities
Dividends paid to owners of parent
Dividends paid to non-controlling interests
Other

Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)

Yen in millions

Yen in millions

2,33
33
33
33
33

21,595554(54,114)(40,000)(65,810)(119,021)(4,709)(102,604)

20,873
23,107(20,668)–(68,401)(130,044)(3,940)(4,584)(364,109)(183,657)

65,15825,475(368,473)
787,542

205,532
518,905

13

99,836164

8518,905

724,601

Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Net increase (decrease) in cash and cash equivalents
included in assets held for sale
Cash and cash equivalents at end of period

124

Notes to Consolidated Financial Statements
1. Reporting Entity
Bridgestone Corporation (the “Company”) is a stock company located in Japan. The Company’s
consolidated financial statements, which were prepared for the reporting period ended December 31,
represent the Company and its subsidiaries (the “Group”) as well as the Company’s interests in its associates
and joint ventures.
The detail of the Group’s business is stated in Note “6. Operating Segments.”
2. Basis of Preparation(1) Statement of compliance with IFRSThe consolidated financial statements of the Group have been prepared in accordance with International
Financial Reporting Standards (“IFRS”) pursuant to the provisions of Article 93 of the Regulation on
Terminology, Forms, and Preparation Methods of Consolidated Financial Statements (Ministry of
Finance Order No. 28 of 1976), as the Group satisfies the requirements for “specified company
complying with designated international accounting standards” set forth in Article 1-2 of the same
regulation.
The consolidated financial statements were approved on March 26, 2024 by Shuichi Ishibashi, Memberof the Board, Global CEO and Representative Executive Officer of the Company, and Naoki Hishinuma,
Global CFO and Executive Director of the Company.
(2) Basis of measurement
The consolidated financial statements of the Group have been prepared based on historical cost, except
for items such as financial instruments that are measured at fair value as stated in Note “3. Significant
Accounting Policies.”(3) Functional currency and presentation currency
The consolidated financial statements of the Group are presented in Japanese yen, which is thefunctional currency adopted by the Company, and figures less than one million yen are rounded off tothe nearest million yen.
(4) Changes in accounting policies(Application of IAS 12 “Income Taxes”)
Deferred tax related to assets and liabilities arising from a single transaction
Due to the application of IAS 12 “Income Taxes” (amended in May 2021), the accounting treatment wasclarified for the initial recognition, etc. concerning transactions that give rise to equal taxable anddeductible temporary differences at the time of the transaction, and the deferred tax liabilities anddeferred tax assets regarding the taxable and deductible temporary differences are each recognized in the
consolidated statement of financial position.
Together with the application of this standard, the consolidated financial statements for FY2022 wererevised retrospectively. As a result, in the consolidated statement of financial position as of December
31, 2022, deferred tax assets increased by 385 million yen, deferred tax liabilities increased by 341
million yen, retained earnings increased by 29 million yen and non-controlling interests increased by 15
million yen. In the consolidated statement of profit or loss and consolidated statement of comprehensive
income, profit decreased by 61 million yen due to changes in income tax expense.
Because the cumulative effects due to the application of the above standard were reflected in the
consolidated statement of changes in equity, for the previous fiscal year, the balance as of the beginningof the period for retained earnings increased by 91 million yen and the balance as of the beginning of theperiod for non-controlling interests increased by 13 million yen.

125

International Tax Reform—Pillar Two Model Rules
Due to the application of IAS 12, “Income Taxes” (amended in May 2023), the Company has applied atemporary exception to the requirement to recognize and disclose deferred tax assets and deferred tax
liabilities pertaining to income taxes arising from the tax system related to the Pillar Two model rules
announced by the Organisation for Economic Co-operation and Development (OECD). As this standard
was applied retrospectively, deferred tax assets and deferred tax liabilities pertaining to income taxes
arising from the tax system related to the Pillar Two model rules have not been recognized or disclosed.
In the reforms to the Japanese tax system made in 2023, a corporate tax complying with the global
minimum tax was newly created, with the tax reform act (“Act for Partial Revision of the Income Tax
Act, etc.” (Act No. 3 of 2023)) (hereinafter “Revised Corporation Tax Act”) enacted on March 28, 2023
that includes the relevant regulations for the global minimum tax. Within the global minimum tax rulesin the Revised Corporation Tax Act, an income inclusion rule (“IIR”) has been introduced. Applicablefrom the business year starting on or after April 1, 2024, an additional tax will be imposed on parent
companies located in Japan up to the minimum tax rate (15%) of the taxes borne by the subsidiaries, etc.
of those parent companies located in Japan. This rule has already been applied to certain countries
outside of Japan such as EU countries, and the impact of this tax on the Group’s consolidated financial
statements is insignificant.
(5) Changes in presentations(Consolidated statement of cash flows)“Loss recognized upon having measured the disposal group consisting of discontinued operations at fairvalue less cost to sell” and “Increase (decrease) in consumption tax payables” that were stated as
separate line items under “Cash flows from operating activities” for the previous fiscal year are included
in “Other” under “Cash flows from operating activities” from the current fiscal year, as their amounts
have become immaterial. “Increase (decrease) in accounts payable – bonuses,” “Increase (decrease) inallowance for doubtful accounts,” and “Increase (decrease) in provision for loss on litigation” that were
included in “Other” under “Cash flows from operating activities” for the previous fiscal year are
separately stated from the current fiscal year, as their amounts have become material. The consolidated
financial statements of the previous fiscal year have been reclassified to reflect this change inpresentation.
As a result, 19,161 million yen stated in “Loss recognized upon having measured the disposal groupconsisting of discontinued operations at fair value less cost to sell,” (13,733) million yen stated in“Increase (decrease) in consumption tax payables,” and (44,332) million yen stated in “Other” under“Cash flows from operating activities” were reclassified for the previous fiscal year as “Increase(decrease) in accounts payable - bonuses” in the amount of (1,349) million yen, “Increase (decrease) inallowance for doubtful accounts” in the amount of (3,462) million yen, “Increase (decrease) in provision
for loss on litigation” in the amount of (1,453) million yen, and “Other” in the amount of (32,640)
million yen.
Because of the increasing use and conversion of short-term borrowings, which have short turnover,involve large sums of money, and have short repayment deadlines, “Proceeds from short-termborrowings” and “Repayments of short-term borrowings” under “Cash flows from financing activities,”
which were indicated as gross amounts in the previous fiscal year, are indicated beginning from thisfiscal year as a net amount in “Increase (decrease) in short-term borrowings.” “Purchase of treasury
stock” that was stated as a separate line item under “Cash flows from financing activities” for theprevious fiscal year is included in “Other” from the current fiscal year, as its amount has become
immaterial. The consolidated financial statements of the previous fiscal year have been reclassified toreflect this change in presentation.
As a result, 204,077 million yen stated in “Proceeds from short-term borrowings,” (182,482) million yen
stated in “Repayments of short-term borrowings,” (100,004) million yen stated in “Purchase of treasury
stock,” and (2,600) million yen under “Other” in “Cash flows from financing activities” for the previous
fiscal year were reclassified as “Increase (decrease) in short-term borrowings” in the amount of 21,595
million yen and “Other” in the amount of (102,604) million yen.

126

3. Significant Accounting Policies(1) Basis of consolidation
1)

Subsidiaries
A subsidiary is an entity under the control of the Group. The Group controls an entity when it is
exposed to or has rights to variable returns arising from its involvement in the entity and has anability to affect those returns through its power over the entity.
The financial statements of subsidiaries are included in the consolidated financial statements fromthe date the Group gains control until the date that control is lost. If any accounting policies applied
by a subsidiary differ from those of the Group, adjustments are made to the subsidiary’s financial
statements where needed to bring them in line with the Group’s accounting policies. The balancesof payables and receivables and transactions within the Group, as well as unrealized gains or losses
arising from internal transactions within the Group, are eliminated when preparing the consolidated
financial statements.
Comprehensive income of subsidiaries is attributed to owners of parent and non-controllinginterests, even if this results in a negative balance in non-controlling interests.
When the closing date of a subsidiary is different from that of the Group, the subsidiary
implements its financial statements based on the provisional accounting as of the Group’s closing
date. The main subsidiary with a different closing date is BRIDGESTONE INDIA PRIVATE LTD.,
which adopts a closing date of March 31 due to the local legal system where it operates.
Changes in the Group’s ownership interest in subsidiaries that do not result in a loss of control areaccounted for as equity transactions, and the difference between the amount by which noncontrolling interests are adjusted and the fair value of the consideration is directly recognized inequity as interests attributable to the shareholders of the Company.
If the Group loses control over a subsidiary, gains and losses derived from the loss of control arerecognized in profit or loss.

2)

Associates
An associate is an entity which the Group does not control, but exerts significant influence on
financial and operating policies thereof. The equity method is applied to associates from the datethat the Group has significant influence to the date that it loses the significant influence.

3)

Joint ventures
A joint venture is an entity jointly controlled by two or more parties, including the Group under thecontractually agreed sharing of control over economic activities of the joint venture, which exists
only when strategic financial and operating decisions related to the relevant activities require
unanimous consent of the parties sharing control.
The equity method is applied to joint ventures held by the Group.

(2) Business combinations
Business combinations are accounted for by the acquisition method. Consideration for acquisition ismeasured as the sum of the acquisition-date fair values of the assets transferred, liabilities assumed, andequity instruments issued by the Group in exchange of control over the acquired company. If
consideration for acquisition exceeds the fair value of identifiable assets and liabilities, such excess isrecorded as goodwill in the consolidated statement of financial position. Conversely, if the considerationis less than the fair value, the difference is immediately recognized in profit or loss in the consolidated
statement of profit or loss. Acquisition costs that are attributable to a business combination are expensed
as incurred.
If the initial accounting for a business combination is incomplete by the end of the fiscal year in which
the business combination occurs, the Group reports provisional amounts for the items for which theaccounting is incomplete. The provisional values recognized at the acquisition date are retrospectively
adjusted to reflect new information obtained during a certain designated period (the “measurement
period”) on facts and circumstances that existed at the acquisition date and, if known at the acquisitiondate, would have affected the measurement of the amounts recognized. Additional assets or liabilities are127

recognized if this new information is known to have resulted in the additional recognition of assets or
liabilities. The measurement period may not exceed one year.
The acquisition of additional non-controlling interests is accounted for as an equity transaction, andaccordingly, it does not recognize goodwill attributable to such transactions.
Business combinations under common control (i.e., transactions in which all of the combining entities
and/or businesses are ultimately controlled by the same party or parties both before and after thebusiness combination and the common control is not transitory) are accounted for at carrying amount.
(3) Foreign currency translation1)

Foreign currency transactions
Foreign currency transactions are translated into the functional currency of each entity of theGroup by using the exchange rate at the date of the transaction or a rate that approximates suchrate.
At the end of each reporting period, monetary items denominated in foreign currencies aretranslated into functional currencies using the exchange rate at the end of each reporting period.
Non-monetary items at fair value denominated in foreign currencies are translated at an exchange
rate of the date when their fair values are measured.
Exchange differences arising from translation or settlement of monetary items denominated inforeign currencies are recognized in profit or loss. However, those translation differences arisingfrom financial assets measured through other comprehensive income as well as from cash flow
hedges are recognized in other comprehensive income.

2)

Financial statements of foreign operations
Assets and liabilities of foreign operations, including any goodwill arising on the acquisition of aforeign operation and any fair value adjustments, are translated into presentation currency using theexchange rate at the end of the reporting period. Additionally, income and expenses of foreign
operations are translated into presentation currency using average exchange rates during the period,
except where the exchange rates fluctuate significantly. Financial statements of foreign operations
under a high inflationary economy reflect the effect of inflation, and revenue and expenses arecalculated in the presentation currency using the exchange rate at the end of the reporting period.
Exchange differences arising from translation of the financial statements of foreign operations arerecognized in other comprehensive income. For disposals of entire interests in foreign operations
and partial disposals of interests resulting in loss of control or loss of significant influence,translation differences are recognized in profit or loss as part of the gain or loss on disposal.

(4) Financial instruments
1)

Financial assets other than derivatives
a Initial recognition and measurement
Trade and other receivables are initially recognized on the date when they are incurred. Allother financial assets are initially recognized on the date when the Group becomes a party to
the contract on such financial instruments.
At initial recognition, financial assets other than derivatives, which meet both of the following
requirements, are classified as financial assets measured at amortized cost, while the rest areclassified as financial assets measured at fair value.
・ The assets are held based on the business model whose objective is to hold the assets inorder to collect contractual cash flows.
・ The contractual terms of the financial asset give rise on specified dates to cash flowsthat are solely payments of principal and interest on the principal amount outstanding.
Financial assets measured at fair value are classified into either financial assets whose changes
in fair value after acquisition are recognized in profit or loss (“financial assets measured at fairvalue through profit or loss”) or financial assets whose changes in fair value after acquisition
are recognized in other comprehensive income (“financial assets measured at fair value
through other comprehensive income”).
128

At initial recognition, equity instruments that are not designated as financial assets measured atfair value through other comprehensive income and debt instruments that do not meet therequirements for the amortized cost measurement are classified as financial assets measured atfair value through profit or loss.
Equity instruments that are not held for trading are, in principle, designated as financial assets
measured at fair value through other comprehensive income at initial recognition.
All the financial assets, except for those classified as financial assets measured at fair value
through profit or loss, are measured at fair value plus transaction costs directly attributable tothe acquisition of the assets.

2)b

Subsequent measurement
Financial assets after the initial recognition are measured as follows, depending on respectiveclassifications:(a) Financial assets measured at amortized cost
After initial recognition, financial assets measured at amortized cost are measured atamortized cost by using the effective interest method.
(b) Financial assets measured at fair value through profit or loss
After initial recognition, financial assets measured at fair value through profit or loss are
remeasured at fair value as of each closing date, and changes in fair value and dividends arerecognized in profit or loss.
(c) Financial assets measured at fair value through other comprehensive income
Changes in fair value measured after initial recognition are recognized in othercomprehensive income. Such amounts are reclassified into retained earnings in case of
derecognition or a significant decline in the fair values. Dividends from such financial assets
are recognized in profit or loss as finance income in the period when the Group’s right toreceive payment of the dividends is established.

c

Derecognition
Financial assets are derecognized when the right to receive benefits expires or all the risk andrewards of ownership of the financial assets are transferred to other entities.

Impairment of financial assets measured at amortized cost
To account for impairment of items such as financial assets measured at amortized cost, the Group
recognizes an allowance for doubtful accounts against expected credit losses on such financial
assets.
At each reporting date, financial assets are assessed whether there has been a significant increase incredit risk on financial instruments since initial recognition.
If credit risk on a financial instrument has not increased significantly since initial recognition, theallowance for doubtful accounts associated with the relevant financial instrument is measured at an
amount equal to 12-month expected credit losses. In contrast, if credit risk on a financial
instrument has increased significantly since initial recognition, the allowance for doubtful accounts
associated with the relevant financial instrument is measured at an amount equal to lifetime
expected credit losses.
However, the allowance for doubtful accounts for trade receivables and the like are always
measured at an amount equal to lifetime expected credit losses.
Expected credit losses of financial instruments are estimated in a way that reflect the following
items:• Unbiased and probability-weighted amount that is determined by evaluating a range ofpossible outcomes;• Time value of money• Reasonable and supportable information that is available without undue cost or effort at thereporting date about past events, current conditions and forecasts of future economic
conditions.
The amounts of these measurements are recognized in profit or loss.
129

The carrying amount of these financial assets is directly reduced for the impairment when they are
expected to become non-recoverable in the future, offsetting the carrying amount by the allowancefor doubtful accounts.
3)

4)

Financial liabilities other than derivatives
a Initial recognition and measurement
Debt securities issued by the Group are initially recognized at the date of issuance. All otherfinancial liabilities are recognized on the date when the Group becomes a party to the contract
on such financial instruments.
Financial liabilities other than derivatives are classified into either financial liabilities
measured at amortized cost or financial liabilities measured at fair value through profit or loss
at initial recognition.
All the financial liabilities are initially measured at fair value, while financial liabilities
measured at amortized cost are measured at fair value less directly attributable transaction
costs.
b

Subsequent measurement
Financial liabilities after the initial recognition are measured as follows, depending on
respective classifications:(a) Financial liabilities measured at amortized cost
After initial recognition, financial liabilities measured at amortized cost are measured atamortized cost by using the effective interest method.
(b) Financial liabilities measured at fair value through profit or loss
After initial recognition, financial liabilities measured at fair value through profit or loss are
remeasured at fair value as of each closing date with any changes in fair value being
recognized in profit or loss.

c

Derecognition
Financial liabilities are derecognized when the obligation is discharged, canceled or expired.

Derivatives and hedge accounting
The Group uses derivatives, including forward exchange contracts and interest rate swap
transactions, for the purpose of hedging foreign currency risk and interest rate risk.
At the inception of the hedge, the Group designates and documents the hedging relationshipbetween a hedging instrument and a hedged item as well as the Group’s risk management objective
and strategy concerning the hedge. That documentation includes the hedging relationship, the risk
management objective and strategy for undertaking the hedge, as well as the assessment of thehedge effectiveness.
These hedges are expected to be highly effective in offsetting changes in the fair value or the cash
flows; however, the Group assesses whether the hedging relationship meets the requirements forhedge effectiveness, at the inception of the hedging relationship and on an ongoing basis.
Derivatives are initially recognized at fair value. After initial recognition, derivatives are measured
at fair value and the subsequent changes in fair value are accounted for as follows:a

Fair value hedges
Fair value changes on derivatives are recognized in profit or loss.
Fair value changes on hedged items attributable to hedged risks are recognized in profit or loss
with the carrying amounts of the hedged items being adjusted.

b

Cash flow hedges
For the portion of the gain or loss on the hedging instrument that is determined to be aneffective hedge, changes in fair value are recognized in other comprehensive income. When
130

cash flows of the hedged item affect profit or loss, they, together with the hedged item, areimmediately recognized in profit or loss.
For the ineffective portion of hedge, the changes in fair value are recognized in profit or loss.
The Group discontinues hedging accounting prospectively when the hedging instrument is
expired, sold, terminated or exercised, or when the hedge no longer qualifies for hedge
accounting.
c5)

Derivatives not designated as hedging instruments
Fair value changes on derivatives are recognized in profit or loss.

Offsetting financial instruments
A financial asset and a financial liability are offset and the net amount presented only when theGroup currently has a legally enforceable right to set off the recognized amounts; and intends
either to settle on a net basis or to realize the asset and settle the liability simultaneously.

(5) Fair value measurement
Certain assets and liabilities are recognized at fair value. The fair value of such assets and liabilities isdetermined based on market information, such as quoted market price or valuation techniques including
the market approach, the income approach and the cost approach. The inputs used in the fair value
measurement are categorized into the following three levels.
Level 1: Fair value that is measured by using quoted prices in active markets
Level 2: Fair value, other than Level 1, that is determined by directly or indirectly using theobservable price
Level 3: Fair value determined by using valuation techniques that incorporate unobservable inputs(6) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, demand deposits, and short-term investments withmaturities not exceeding three months from the acquisition date, that are readily convertible into cash
and subject to insignificant risk of changes in value.
(7) Inventories
Inventories are measured at the lower of cost and net realizable value. The cost of inventories includes
costs of purchase, costs of conversion and other costs incurred in bringing the inventories to theirpresent location and condition. The cost of inventories is calculated by primarily using the movingaverage method. Net realizable value is determined at the estimated selling price in the ordinary courseof business less estimated costs of completion and the estimated costs necessary to make the sale.
(8) Property, plant and equipment
Property, plant and equipment are measured by using the cost model, and stated at cost less any
accumulated depreciation and any accumulated impairment losses. The cost of an item of property, plantand equipment includes any costs directly associated with its acquisition, and the costs of dismantling
and removing the item and restoring the site on which it is located, as well as the borrowing costs
eligible for capitalization.
The depreciation of property, plant and equipment other than land and construction in progress iscalculated using the straight-line method over the following estimated useful lives. The estimated usefullife of each main asset item is as follows.
Buildings and structures:
10 to 50 years
Machinery and vehicles:
3 to 17 years
Tools, furniture and fixtures:
2 to 20 years
The depreciation method for property, plant and equipment is reviewed at the end of each reporting
period, and any change thereof is accounted for as a change in accounting estimate.
131(9) Goodwill and intangible assets
1)

Goodwill
The Group recognizes goodwill arising from business combinations as an asset as of the date whencontrol is obtained (the acquisition date). The measurement of goodwill at initial recognition ispresented in “(2) Business combinations.”
Goodwill is stated at cost less accumulated impairment losses. The Group does not amortize
goodwill, but tests for impairment annually or whenever there is any indication of impairment. For
the purpose of impairment test, goodwill obtained in business combinations is allocated to a cashgenerating unit or groups of cash-generating units that are expected to benefit from the synergies of
the combination on and after the acquisition date.
Impairment losses of goodwill are recognized in profit or loss and not reversed subsequently.

2)

Intangible assets
The Group measures intangible assets using the cost model and stated at cost less any accumulated
amortization and any accumulated impairment losses.
Separately acquired intangible assets are initially measured at cost, while the cost of intangible
assets acquired in a business combination is measured at fair value as of the acquisition date.
Expenditures for internally generated intangible assets are recognized as an expense incurred
during the period, except for development costs eligible for capitalization.
Intangible assets with finite useful lives are amortized by using the straight-line method over theirrespective estimated useful lives. If there is an indication of impairment, they are tested for
impairment. The estimated useful life of each main asset item is as follows.
Software:1 to 10 years
Trademarks:
1 to 10 years
The amortization method for intangible assets with finite useful lives is reviewed at the end of eachreporting period, and any change thereof is accounted for as a change in accounting estimate.
Intangible assets with indefinite useful lives are not amortized but subject to impairment test, andstated at cost less any accumulated impairment losses. Intangible assets are tested for impairment
individually or at cash-generating unit level annually or whenever there is any indication of
impairment.

(10) Leases
1)

LesseeAt inception of a contract, the Group recognizes a right-of-use asset and a lease liability for lease
components other than short-term leases and leases for which the underlying asset is of low value.
At the commencement date, the Group measures the right-of-use asset at cost and the lease liability
at the present value of the lease payments that are not paid at that date.
The lease term is determined as the non-cancellable period of a lease, together with both: periods
covered by an option to extend the lease (if the Group is reasonably certain to exercise that option);and periods covered by an option to terminate the lease (if the Group is reasonably certain not toexercise that option).
After the commencement date, the right-of-use asset is measured at cost less any accumulated
depreciation and any accumulated impairment losses. The Group applies the depreciation
requirements in International Accounting Standards (IAS) 16 “Property, Plant and Equipment” indepreciating the right-of-use asset. The Group also applies IAS 36 “Impairment of Assets” todetermine whether the right-of-use asset is impaired and to account for any impairment loss
identified.
If the lease transfers ownership of the underlying asset to the Group by the end of the lease term,
the Group depreciates the right-of-use asset from the commencement date to the end of the usefullife of the underlying asset. Otherwise, the Group depreciates the right-of-use asset from thecommencement date to the earlier of the end of the useful life of the right-of-use asset or the end of
the lease term.
132

After the commencement date, the Group measures the lease liability by:• increasing the carrying amount to reflect interest on the lease liability;• reducing the carrying amount to reflect the lease payments made; and• remeasuring the carrying amount to reflect changes to the lease payments or a leasemodification, or to reflect revised in-substance fixed lease payments.
2)

LessorRental income is recognized on a straight-line basis over the lease term. Rental income arisingfrom subleased properties is recognized in other income.

(11) Impairment of non-financial assets
The Group assesses, for each fiscal year, whether there is any indication that an asset may be impaired.
If any such indication exists (or if the impairment test is required each year), the Group estimates therecoverable amount of the asset. If it is not possible to estimate the recoverable amount of an individual
asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset
belongs. The recoverable amount of an asset or a cash-generating unit is measured at the higher of its
fair value less costs to sell and its value in use. When the carrying amount of the asset or the cashgenerating unit exceeds the recoverable amount, the Group recognizes an impairment loss for the asset
and reduces the carrying amount of the asset to its recoverable amount. In calculating the asset’s value in
use, the estimated future cash flows are discounted to the present value by using a pre-tax discount ratethat reflects current market assessments of the time value of money and other factors such as the risks
specific to the asset. The fair value less costs to sell is calculated by using an appropriate valuation
model supported by indications of fair value available to the Group.
The Group assesses whether there is any indication that an impairment loss recognized in prior years for
asset other than goodwill may have decreased or may no longer exist due to a change in assumptions
used to determine the recoverable amount or other reasons. If any such indication exists, the Groupestimates the recoverable amount of the asset or the cash-generating unit. Then if such recoverable
amount exceeds the carrying amount of the asset or the cash-generating unit, the Group reverses an
impairment loss to the extent not exceeding the lower of the estimated recoverable amount and thecarrying amount that would have been determined (net of amortization or depreciation) had no
impairment loss been recognized for the asset in prior years.
(12) Assets held for sale and discontinued operations
An asset or asset group that is expected to be recovered through a sale transaction rather than throughcontinuing use is classified as an asset or disposal group held for sale if it is highly probable that theasset or asset group will be sold within one year from the end of the reporting period; the asset or asset
group is available for immediate sale in its present condition; and the management of the Group iscommitted to such sale. An asset held for sale is not depreciated or amortized and measured at the lowerof its carrying amount and fair value less costs to sell. A discontinued operation is recognized if theoperation includes a component of an entity that either has been disposed of or is classified as held for
sale, represents a separate line of business of the Group or geographical area, and is part of a plan todispose of a separate line of business of the Group or geographical area.
(13) Employee benefits
1)

Short-term employee benefits
The undiscounted amount of short-term employee benefits is recognized as an expense in the
period in which the employees render related services. The bonuses and paid absences arerecognized as a liability and an expense when the Group has a present legal or constructive
obligation to pay the benefits in return for the past services rendered by employees, and the Groupcan make a reliable estimate of the amount.

133

2)

Post-employment benefits
The Group has adopted a defined benefit plan (such as a corporate pension plan and a lump-sum
retirement benefit plan) and a defined contribution plan as the post-employment benefit plans for
its employees.
The Group determines the present value of defined benefit obligation as well as the related current
service cost and past service cost by using the projected unit credit method. The discount rate isdetermined by first setting the discount period based on the periods until the dates on which thebenefits for each fiscal year will be paid, and then by referencing to market yields on high-grade
corporate bonds and the like at the end of the reporting period corresponding the discount period.
The defined benefit plan liability or asset is determined by subtracting the fair value of the plan
assets from the present value of the defined benefit obligation. Remeasurements of defined benefit
plans are recognized in a lump sum in other comprehensive income when they arise, andreclassified to retained earnings immediately. Past service cost is recognized in profit or loss for theperiod in which it is incurred.
The Group accounts for the defined contribution plan by recognizing an expense when the Groupmakes contribution to the plan.
Certain consolidated subsidiaries primarily in the United States have adopted a defined benefit
retirement plan and a post-employment medical benefit plan to prepare for the retirement benefits
to the employees. A post-employment medical benefit plan in the United States is included in the
net defined benefit liability due to the nature similar to the retirement benefits.

(14) Share-based payment
The Group has adopted the stock option plan and restricted share-based remuneration plan as an equitysettled share-based payment plan as well as the Performance Share Units (PSU) plan and the Restricted
Stock Units (RSU) plan as a cash-settled share-based payment plan. Stock options are estimated at fairvalue at the date of grant, taking into account the estimated number of options to be vested, andrecognized as expenses over the vesting periods in the consolidated statement of profit or loss while
corresponding increases to equity are recognized in the consolidated statement of financial position. Fairvalue of stock options granted is calculated, in accordance with various terms of such options, using theBlack-Scholes model. Restricted share-based remuneration is measured at fair value on the grant dateand recognized in the consolidated statement of profit or loss as expenses over the vesting period fromthe grant date, and the same amount is recognized as an increase in equity in the consolidated statementof financial position. The fair value of restricted share-based remuneration is measured by reference tothe fair value of granted shares of the Company.
For the PSU plan, the Group recognizes awards as an expense over the vesting period, recording thesame amount as an increase in a liability. As of the reporting date and the settlement date, the Groupremeasures the fair value of the liability and recognizes any changes in fair value in profit or loss. The
RSU plan, etc. are measured at the standard amount of compensation by position and recognized in the
consolidated statement of profit or loss as expenses over the vesting period, and the same amount isrecognized as an increase in liabilities in the consolidated statement of financial position. As of the dateof allotment and the day of lifting of transfer restriction of the Company’s shares, the Group remeasures
the fair value of the liability and recognizes any changes in fair value in profit or loss.
(15) Provisions
The Group recognizes provisions when it has a present obligation (legal or constructive) as a result of apast event; when it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation; and when a reliable estimate can be made of the amount of theobligation.
Where the effect of the time value of money is material, the amount of a provision is measured at thepresent value of the expenditures expected to be required to settle the obligation. The present value ofthe expenditures is calculated by using a pre-tax discount rate that reflects current market assessments ofthe time value of money and the risks specific to the liability with uncertainty of the occurrence ofobligating events being reflected in the estimated future cash flows.

134

Provisions that the Group recognizes are mainly as follows:1)

Provision for compensation for industrial accidents
The Group estimates and records an amount based on past and current experience to prepare for thepayment of the medical expenses, the absence from work compensation, etc. incurred as a result ofindustrial accidents. The outflow of the economic benefits is supposed to occur mainly during theperiod one year after the end of the current fiscal year.

2)

Provision for loss on litigation
To prepare for the expenditures of litigation-related expenses, the Group estimates and records anamount of compensation for damages, settlement package, etc. that is currently expected to be
incurred in the future. The outflow of the economic benefits is supposed to occur mainly within
one year from the end of the current fiscal year.

3)

Provision for product warranties
To prepare for the expenditures for after-sales and other services for products sold, the Groupestimates and records an amount to be incurred based on past experience. The outflow of theeconomic benefits is supposed to occur mainly within one year from the end of the current fiscal
year.

(16) Revenue
The Group recognizes revenue at an amount reflecting the amount of consideration to which the Group
expects to be entitled in exchange for transferring the goods and services to the customer based on thefollowing five-step approach, except for interest and dividend income, etc. received under IFRS 9“Financial Instruments”:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.
The Group engages in the premium tire business, solutions business, and chemical and industrial
products and diversified products businesses.
In these businesses, because customers mainly obtain control over the product at the time of delivery of
the product, the performance obligations are considered to be satisfied at that time, and revenue isrecognized at the time of delivery of the product.
In addition, consideration for performance obligations is mainly received within one year fromsatisfaction of the performance obligations, and contains no significant financing component.
Revenue is measured at an amount of consideration promised in a contract with a customer lessestimated future returns, discounts and rebates. The amount of returns is estimated and calculated basedon an expected return rate derived from the past data and the like. As for discounts and rebates, theamount of future payments is mainly estimated and calculated based on contracts and the like until
actual results are confirmed.
(17) Government grants
Government grants are recognized at fair value when conditions for the receipt of grants have been met
and reasonable assurance for the receipt could be obtained.
When government grants are related to the items of expense, government grants are recognized in profit
or loss on a systematic basis over the periods in which the Group recognizes as expenses the related
costs for which the grant is intended to compensate. For grants related to assets, the amount of the grant
is deducted from the cost of the asset.
135

(18) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction, or production of a qualifying asset
are capitalized and form part of the cost of the asset. A qualifying asset is an asset that necessarily takes
a substantial period of time to get ready for its intended use or sale. Other borrowing costs arerecognized as expenses in the period in which they are incurred.
(19) Income taxes
Income taxes consist of current tax and deferred tax. These are recognized in profit or loss, excluding tax
arising from the items recognized in other comprehensive income or directly in equity, and tax arisingfrom business combinations.
Current taxes are measured at an expected amount of taxes to be paid to or of refund from the taxation
authorities. The amount of tax is calculated based on the tax rates and the tax laws that have beenenacted, or substantially enacted by the reporting date.
Deferred taxes are recognized for the temporary differences between the carrying amount of assets andliabilities for accounting purposes and their tax bases, unused tax losses carryforward and unused tax
credits carryforward as of the reporting date.
Deferred tax assets and liabilities are not recognized for following temporary differences:• Temporary differences arising from the initial recognition of goodwill• Temporary differences arising from initial recognition of assets and liabilities from transactions
that are not business combinations, affect neither accounting profit nor taxable income (loss), anddo not give rise to equal taxable and deductible temporary differences at the time of the transaction• Deductible temporary differences arising from investments in subsidiaries and associates, andinterests in joint arrangements when it is probable that the temporary difference will not reverse in
the foreseeable future or when it is not probable that taxable profit will be available against which
the temporary difference can be utilized.
• Taxable temporary differences arising from investments in subsidiaries and associates, andinterests in joint arrangement when the Group is able to control the timing of the reversal of thetemporary difference and it is probable that the temporary difference will not reverse in theforeseeable future.
A deferred tax liability is recognized for all taxable temporary differences in principle, and a deferred tax
asset is recognized for all deductible temporary differences to the extent that it is probable that taxable
income will be available against which deductible temporary differences can be utilized.
Carrying amount of deferred tax assets is reviewed each period and reduced to the extent that it is nolonger probable that sufficient taxable income will be available to use all or part of the benefit of thedeferred tax assets. Unrecognized deferred tax assets are reviewed each period and are recognized to theextent that it has become probable that future taxable income will allow the deferred tax assets to be
recovered.
Deferred tax assets and liabilities are measured at the tax rates and by the tax laws that are expected toapply to the period when the assets are realized or the liabilities are settled based on the tax rates and tax
laws enacted or substantively enacted at the end of the reporting period.
For uncertain income tax positions, the Group recognizes an asset or a liability at a reasonably estimatedamount if the tax position has a high probability of being accepted based on a tax law interpretation.
Deferred tax assets and liabilities are offset against each other if the Group has a legally enforceable
right to offset current tax assets against current tax liabilities and when either of the following are met:
income taxes are levied by the same taxation authority on the same taxable entity; or income taxes arelevied by the same taxation authority on different taxable entities, but they either have the intention tosettle current tax liabilities and current tax assets on a net basis or plan to realize assets and settle
liabilities simultaneously.
136

(20) Treasury stock
Treasury stock is measured at cost and presented as a deduction from equity. No gain or loss isrecognized on the purchase, sale or retirement of treasury stock. The difference between the carrying
amount and the consideration thereof at the time of sale is recognized as equity.
(21) Dividends
Of the dividend distributions to the shareholders of the Company, the year-end dividend is recognized as
a liability for the period that includes the date of resolution by the Company’s shareholders’ meeting,while the interim dividend is recognized as a liability for the period that includes the date of resolution
by the Board of Directors.
(22) Earnings per share
Basic earnings per share are calculated by dividing profit or loss attributable to owners of parent by theweighted-average number of shares of ordinary shares outstanding adjusted by the number of shares oftreasury stock during the period. Diluted earnings per share are calculated taking into consideration theeffect of all potential shares with dilutive effect.
(23) Adjusted operating profit
Adjusted operating profit is determined by adding or subtracting certain adjustment items to or from preadjusted metrics.
Reconciliations: Business and plant restructuring income and expenses, impairment losses, gain on
reversal of impairment losses, loss on disaster, insurance claim income, and other gains
and losses with large amounts related to one time event
Management of the Group determines the adjustment items based on whether they can help provide
effective comparative information on the Group performance and appropriately reflect how thebusinesses are managed. The adjusted operating profit is presented in Note “6. Operating Segments.”
Adjusted operating profit is not defined by IFRS and not necessarily comparable to metrics similarly
named by other companies.
4. Significant Accounting Estimates and Judgements Involving Estimates
In preparing the consolidated financial statements in accordance with IFRS, the Group is required toestablish judgments, estimates and assumptions that affect the application of accounting policies and thereported amount of assets, liabilities, revenues and expenses. Actual results may differ from those estimates.
The estimates and their underlying assumptions are reviewed on an ongoing basis. The effect of any changes
in accounting estimates is recognized in the reporting period in which the change was made and in future
periods.
The items involving estimates and judgments that significantly affect the amounts in the consolidated
financial statements are listed as follows:• Impairment of non-financial assets (Note “16. Impairment of Non-financial Assets”)• Recoverability of deferred tax assets (Note “18. Income Taxes”)• Provisions (Note “21. Provisions”)• Measurements of defined benefit obligations (Note “23. Employee Benefits”)• Fair value measurement of financial instruments (Note “35. Financial Instruments”)• Uncertain income tax positions (Note “18. Income Taxes”)• Measurement of disposal groups classified as held for sale (Note “13. Assets Held for Sale”)

137

5. New Standards and Interpretations Not Yet Adopted
While there are newly issued or revised standards and interpretations that were issued on or before the dateof approval of the consolidated financial statements but have not yet been early adopted by the Group, noneof them have a material impact on the Group’s consolidated financial statements.
6. Operating Segments(1) Overview of reporting segments
The Group’s reporting segments are components of the Group for which discrete financial information isavailable, and that the Board of Directors and the Management Committee regularly review in order todecide the allocation of business resources and assess operating performance.
The Group has four reportable segments: “Japan,” “China, Asia-Pacific,” “Americas,” and “Europe,
Russia, Middle East, India and Africa.” The reportable segments have been organized for the purpose of
disclosing business results more appropriately based on the Strategic Business Units (SBU)—theclassification of the Group’s businesses for management control purposes. Within the above segments,
the Group runs its premium tire business, solutions business, and chemical and industrial products anddiversified products business.
Starting in the current fiscal year, to evaluate the contributions of our Japanese production sites to theGroup’s global supply chain management, we have changed Japan export profits or losses for our
general tire transactions from the “Corporate or elimination” segment to the “Japan” segment.
The Group has classified its US building materials business, anti-vibration rubber business, andchemical products solutions business as discontinued operations, thereby deducting such discontinued
operations from monetary amounts for the previous fiscal year, and the current fiscal year. Details on
discontinued operations are presented in Note “31. Discontinued Operations.”
The transfer of Russian business was completed in December 2023.
(2) Segment revenue and business results
Revenue and business results of the continuing operations by reportable segment of the Group are as
follows. The Board of Directors assesses the segment performance and determines resource allocation
after reviewing revenues and adjusted operating profit. Internal sales or transfers between segments are
determined primarily at selling prices based on arm’s length transaction prices or total cost. Also, figures
for the previous fiscal year have been reclassified in accordance with the new segment structure
described in (1).
Previous fiscal year (Year ended December 31, 2022)(Yen in millions)
Reportable segments
Europe,Russia,China,
AmericasMiddleAsia-PacificEast, India
and Africa

Japan

Revenue
External revenue
Inter-segment revenue
Total revenue
Segment profit (loss)
Adjusted operating profit
Other items
Depreciation andamortization
Impairment losses
Gain on reversal of
impairment losses on fixed
assets889,692
267,373
1,157,064

Total

Other
(Note)

Corporate
Consolior
dated totalelimination

376,713 1,970,276
80,292
17,756457,005 1,988,032

856,443 4,093,124
13,577
378,998
870,020 4,472,122

16,90763,55980,466

40 4,110,070(442,557)–(442,518) 4,110,070

150,593

39,937251,183

66,350508,0627,299(32,732)

482,629

67,606

31,378113,139

45,158257,281

7,474

17,353

282,108

1,959

1,797

155

13,581

17,492––

17,492

–

36

–

–

36

–

–

36

138

(Note)Service businesses and other businesses not included in the reportable segments are included in the“Other” segment.

Current fiscal year (Year ended December 31, 2023)(Yen in millions)Japan

Revenue
External revenue
Inter-segment revenue
Total revenue
Segment profit (loss)
Adjusted operating profit
Other items
Depreciation andamortization
Impairment losses
Gain on reversal of
impairment losses on fixed
assets(Note)

Reportable segments
Europe,Russia,China,
AmericasMiddleAsia-PacificEast, India
and Africa

946,547
295,889
1,242,437

Total

Other
(Note)

Corporate
Consolior
dated totalelimination

398,135 2,063,073
62,957
16,968461,093 2,080,042

888,479 4,296,235
20,022395,837
908,501 4,692,072

17,54360,84978,391

23 4,313,800(456,686)–(456,663) 4,313,800

206,485

41,619211,960

25,114

485,177

5,580(10,155)

480,60274,932

31,689

121,798

50,503278,9218,060

18,824

305,805

806

861

166

–

1,833

–

–

1,833

14

4

–

–

18

–

–

18

Service businesses and other businesses not included in the reportable segments are included in the“Other” segment.

(Reconciliation from adjusted operating profit to profit before tax)
(Yen in millions)
Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)

Adjusted operating profit (Note 1)
Adjustment items (income) (Note 2)

482,6296,193

480,602
21,731

Adjustment items (expenses) (Note 6)
Operating profit

47,524441,298

20,558
481,775

Finance income
Finance costs

18,28341,89835,38578,346

Share of profit (loss) of investments accounted forusing equity method

5,775

5,341

423,458

444,154

Profit before tax(Note 1)

For adjusted operating profit, adjustment items (income and expenses) are excluded fromoperating profit.

(Note 2)The major breakdown of adjustment items (income) is as follows:(Yen in millions)
Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)

1,216(Note 3) 4,942

2,347(Note 4) 8,645

Gain on reversal of impairment losses on fixed
assets36

18

Other income with large amounts related to one
time event–(Note 5) 10,720

6,193

21,731

Insurance claim income
Business and plant restructuring income

Adjustment items (income)139

(Note 3)

Mainly reversal of impairment losses and gain on sale of fixed assets associated with thereorganization of overseas tire plants are recorded.

(Note 4)Mainly reversal of impairment losses, gain on sale of fixed assets and gain on transfer of interests
associated with the reorganization of overseas tire plants are recorded.

(Note 5)This was primarily the recording of gains on the sale of land.

(Note 6)The major breakdown of adjustment items (expenses) is as follows:(Yen in millions)
Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)(Note 7) 17,492

1,833

Cost of sales (loss on disaster)
Other expenses (loss on disaster)

5,979
211

1,777
403

Business and plant restructuring expenses (Note 8)
Other expense with large amounts related to one

7,435

17,921(Note 9) 16,407(Note 10) (1,375)

47,524

20,558

Impairment losses

time event
Adjustment items (expenses)(Note 7)The major breakdown of impairment losses is presented in Note “16. Impairment of Non-financial
Assets.”(Note 8)This was primarily the recording of expenses relating to the reorganization of overseas tire plants.

(Note 9)This was the recording of expenses relating to part replacement, etc. of the affected standard andpower assist bicycles following the recall in October 2022 of certain models of standard and power
assist bicycles manufactured by BRIDGESTONE CYCLE CO., LTD., a consolidated subsidiary of
the Company, and other factors.

(Note 10) This was the recording of expenses relating to part replacement, etc. of the affected standard andpower assist bicycles following the recall in October 2022 of certain models of standard and power
assist bicycles manufactured by BRIDGESTONE CYCLE CO., LTD., a consolidated subsidiary of
the Company, and other factors, but these expenses were partially reversed.
(3) Information about geographical areas
The breakdown of revenue from external customers and non-current assets by geographical area is asfollows:
Revenue from external customers(Yen in millions)
Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)

Japan

575,517596,967

China, Asia-Pacific
Americas529,632
2,094,941

580,0292,189,390[of which, the U.S.]
Europe, Russia, Middle East, India and Africa[1,660,688]
909,980[1,761,809]
947,415

Total

4,110,070

4,313,800(Note) Revenues are broken down by location of sales destination.

140

Non-current assets(Yen in millions)
Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Japan

524,189

547,227

China, Asia-Pacific
Americas267,560
991,792

294,220
1,124,923

Europe, Russia, Middle East, India and Africa

421,165495,2022,204,706

2,461,572

Total(Note) Non-current assets are broken down by location of each asset and do not include financial instruments,
deferred tax assets and assets associated with employee benefits.
(4) Information about major customers
Disclosures are omitted because there are no external customers for which sales account for 10% ormore of revenue in the consolidated statement of profit or loss.
7. Business Combinations
Previous fiscal year (Year ended December 31, 2022)
As stated in Note “37. Subsidiaries and Associates, etc. (2) Loss of control of subsidiaries.”
Current fiscal year (Year ended December 31, 2023)
No item to report.
8. Cash and Cash Equivalents
The breakdown of “Cash and cash equivalents” is as follows:
Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Yen in millions

Yen in millions

Cash and deposits (maturing within three months)

518,905

724,601

Total

518,905

724,601

9. Trade and Other Receivables
The breakdown of “Trade and other receivables” is as follows:
Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Yen in millions

Yen in millions

Notes and accounts receivable

911,246

934,482

Other
Allowance for doubtful accounts

74,083(38,720)

61,444(43,619)

946,608

952,307

Total

Trade and other receivables are presented net of allowance for doubtful accounts in the consolidated
statement of financial position.
Trade and other receivables are classified as financial assets measured at amortized cost.
The changes in allowance for doubtful accounts are presented in Note “35. Financial Instruments (3) Credit
risk management 2) Changes in allowance for doubtful accounts.”14110. Inventories
The breakdown of “Inventories” is as follows:
Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Yen in millions

Yen in millions

Finished products
Work in process

562,245
46,200580,308
50,985

Raw materials and supplies
Other

273,283
3,577

234,274
3,011

Total

885,305

868,578

The amounts of inventories recognized as expenses during the previous fiscal year and the current fiscal year
are 2,445,276 million yen and 2,592,423 million yen, respectively.
11. Other Financial Assets(1) Breakdown of other financial assets
The breakdown of “Other financial assets” is as follows:
Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Yen in millions

Yen in millions

Equity instruments
Long-term loans receivable

56,12017,45076,391
19,118Other

46,04646,493

119,617

142,002

Total
Current assets

15,107

10,792

Non-current assets

104,509131,210

119,617

142,002

Total

Equity instruments are classified as financial assets measured at fair value through other comprehensive
income, and long-term loans receivable are classified as financial assets measured at amortized cost.
(2) Financial assets measured at fair value through other comprehensive income
Major issuers of financial assets measured at fair value through other comprehensive income and theirfair value are as follows:

Issue

Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Yen in millions

Yen in millions

Toyota Motor Corporation
Toyo Tire Corporation

17,762
7,485

25,385
11,800Sumitomo Mitsui Financial Group, Inc.
Otsuka Holdings Co., Ltd.

2,978
861

1,934
1,058

FUJI KYUKO CO., LTD.
Yellow Hat Ltd.

1,169
946

1,032
930

These stocks are designated as financial assets measured at fair value through other comprehensive
income as they are held for the following main reasons: out of necessity from the Company’s businessstrategy perspective, and for the purpose of maintaining and strengthening the business and collaborative
relationships.
142

(3) Derecognition of financial assets measured at fair value through other comprehensive income
To improve its asset efficiency and to review its business relationship and for other purposes, the Groupderecognizes the financial assets measured at fair value through other comprehensive income by sellinga portion of those assets.
The fair values at the time of sale and cumulative gains (losses) recognized in other comprehensive
income are as follows:(Yen in millions)
Previous fiscal year
(Year ended December 31, 2022)
Fair value

Current fiscal year
(Year ended December 31, 2023)

Cumulative gains (losses)
3,327

Fair value

1,654

Cumulative gains (losses)
27,635

19,598When financial assets measured at fair value through other comprehensive income are derecognized or
the fair value declines significantly, cumulative gains (losses) recognized in other comprehensive
income are reclassified to retained earnings. The amounts of cumulative gains (losses), net of tax, whichwere recognized in other comprehensive income and subsequently reclassified into retained earnings,
are 1,144 million yen and 21,013 million yen for the previous fiscal year and the current fiscal year,
respectively.
12. Other Assets
The breakdown of “Other current assets” and “Other non-current assets” is as follows:(1) Other current assets
Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Yen in millions

Yen in millions

Prepaid expenses
Consumption tax receivables

42,55244,02951,39545,841

Other

31,45040,827118,031138,063

Total(2) Other non-current assets
Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Yen in millions

Yen in millions

Retirement benefit assets (Note 1)
Other (Note 2)
Total

19,43450,437

8,274
53,08369,871

61,357(Note 1) The details of retirement benefit assets are presented in Note “23. Employee Benefits (1)Post-employment benefits 3) Reconciliation of defined benefit obligations and plan assets.”(Note 2) “Other” consists primarily of spare parts and income taxes receivable for the previous fiscal
year, and of spare parts for the current fiscal year.

14313. Assets Held for Sale
The breakdown of assets held for sale and liabilities directly associated with assets held for sale is asfollows.
(1) Assets held for sale
Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Yen in millions

Yen in millions

Cash and cash equivalents
Trade and other receivables

5,440
1,382

5,276
870

Inventories
Property, plant and equipment

1,089
6,729

472
2,994

Other financial assets (non-current)
Other

22,112828–
379(8,887)(6,898)28,694

3,093

Accumulated loss recognized upon having
measured the disposal group consisting of
discontinued operations at fair value less cost to
sell
Total

(2) Liabilities directly associated with assets held for sale
Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Yen in millions

Yen in millions

Trade and other payables
Other
Total

1,291

1,058

304

–

1,596

1,058

Assets held for sale and directly associated liabilities for the previous fiscal year, which were mainly in theanti-vibration rubber business, the chemical products solutions business and part of other financial assets(shares) held by the Company have been classified as assets held for sale as the Group decided to sell those
operations.
Assets held for sale and directly associated liabilities for the current fiscal year, mainly in the anti-vibration
rubber business, have been classified as assets held for sale as the Group made a decision to sell those
operations. Details for the anti-vibration rubber business are provided in “31. Discontinued operations.”
For the disposal groups classified as assets held for sale, the anti-vibration rubber business is measured atfair value less costs to sell as the fair value less costs to sell is less than the carrying amount. As a result, a
reversal of expenses of 249 million yen was recorded in “Profit (loss) from discontinued operations” in the
consolidated statement of profit or loss. The fair value has been classified as Level 3 in the hierarchy
because it was assessed based on the selling price.

144

14. Property, Plant and Equipment
The changes in the carrying amount of “Property, plant and equipment,” as well as cost, accumulated
depreciation and accumulated impairment losses are as follows:
Buildings
andstructures
Yen inmillions

Machineryandequipment
Yen inmillions

Tools,
furniture andfixtures
Yen inmillions

Land

Constructionin progress

Other

Total

Yen inmillions

Yen inmillions

Yen inmillions

Yen inmillions

568,671449,262

75,724

165,650

157,984

10,613

1,427,903

–

–

–

–

231,293–

231,293

Depreciation (Note)
Impairment losses(42,318)(5,503)(108,717)(6,851)(43,417)(1,098)

–
(59)

344
(3,128)(4,844)(100)(198,952)(16,739)

Sale or disposal
Transfer from construction(2,681)(2,314)(1,077)(4,614)

(779)

(253)

(11,718)

33,26595,502

41,642

1,175(175,882)

4,298

–

Carrying amounts

Balance as of January 1,
2022
Acquisition

in progress
Exchange differences

47,85045,317

7,349

8,880

16,202

520

126,117

Other changes(3,364)(1,511)

5,858

367

(2,806)215(1,239)Balance as of December 31,
2022

595,920

470,688

84,981

171,399

223,228

10,4491,556,665

Acquisition

–

–

–

–

291,132–

291,132

Depreciation (Note)
Impairment losses(42,964)(904)(112,065)(1,460)(49,870)
(912)

–
(318)

48
(208)

(4,508)(12)(209,359)(3,814)

Sale or disposal
Transfer from construction(3,109)(2,257)(968)(2,984)

(444)

(341)

(10,103)44,593

123,701

47,290904(222,065)

5,577

–

36,70135,511

5,235

5,554

18,743426

102,170

1,330

(911)

9,626

(391)

1,598

563

11,815631,567

513,207

95,382

174,164

312,032

12,154

1,738,506

in progress
Exchange differences
Other changes
Balance as of December 31,
2023(Note)

Depreciation of property, plant and equipment is included in “Cost of sales,” “Selling, general andadministrative expenses” and “Profit (loss) from discontinued operations” in the consolidated
statement of profit or loss.

145

Buildings
andstructures
Yen inmillions

Machineryandequipment
Yen inmillions

Tools,
furniture andfixtures
Yen inmillions

Land

Constructionin progress

Other

Total

Yen inmillions

Yen inmillions

Yen inmillions

Yen inmillions

1,228,916

2,255,923

567,266

171,359

172,456

56,2544,452,174

Balance as of December 31,
2022

1,331,732

2,460,890

624,511

177,087

241,006

60,5884,895,815

Balance as of December 31,
2023

1,417,621

2,644,086

677,923

179,757

325,232

65,0285,309,648

Buildings
andstructures
Yen inmillions

Machineryandequipment
Yen inmillions

Tools,
furniture andfixtures
Yen inmillions

Land

Constructionin progress

Other

Total

Yen inmillions

Yen inmillions

Yen inmillions

Yen inmillions

660,246

1,806,661

491,542

5,709

14,47145,642

3,024,270

735,812

1,990,202

539,530

5,688

17,77850,1393,339,150

786,054

2,130,879

582,541

5,592

13,20052,875

3,571,141

Cost

Balance as of January 1,
2022

Accumulated depreciation andaccumulated impairment loss

Balance as of January 1,
2022
Balance as of December 31,
2022
Balance as of December 31,
2023

146

15. Goodwill and Intangible Assets(1) Changes during the period
The changes in the carrying amount of “Goodwill” and “Intangible assets” as well as cost, accumulated
amortization and accumulated impairment losses are as follows:
Goodwill

Trademarks

Software

Other(Note 2)Total

Yen in millions

Yen in millions

Yen in millions

Yen in millions

Yen in millions

123,68092

14,285
11

60,245–61,90433,330260,11233,433

Amortization (Note 1)
Sale and retirement

–
–

(427)
–

(15,749)(253)(6,269)(134)(22,445)(387)

Impairment losses
Exchange differences(1,433)
14,021

–
1,677

(67)
3,394

(9)
6,154

(1,509)25,246

Transfer of accounts
Other

–
46

–
(1,569)24,7892,376(24,789)
1,020

–
1,875

136,406
868

13,977
3

74,735–

71,20759,617296,325
60,488

Amortization (Note 1)
Sale and retirement

–
–

(461)
–

(22,467)(885)(7,162)(117)(30,090)(1,002)

Impairment losses
Exchange differences–
12,580

–
1,049

(53)
4,387

–
5,643

(53)
23,659Transfer of accounts
Other

–
136

–
–

48,206
1,696(48,206)
(312)

–
1,520

149,990

14,568105,619

80,670350,847

Carrying amounts

Balance as of January 1, 2022
Acquisition

Balance as of December 31, 2022
Acquisition

Balance as of December 31, 2023

(Note 1) Amortization of intangible assets is included in “Cost of sales,” “Selling, general and administrative
expenses” and “Profit (loss) from discontinued operations” in the consolidated statement of profit orloss.
(Note 2) “Software in progress” is included in “Other.”
Cost

Goodwill

Trademarks

Software

Other

Total

Yen in millions

Yen in millions

Yen in millions

Yen in millions

Yen in millions

Balance as of January 1, 2022

125,888

16,018104,589

91,296

337,791

Balance as of December 31, 2022

140,238

16,302

136,603110,702403,845

Balance as of December 31, 2023

156,363

17,610188,741

131,127

493,841

Accumulated amortization andimpairment losses

Goodwill

Trademarks

Software

Other

Total

Yen in millions

Yen in millions

Yen in millions

Yen in millions

Yen in millions

Balance as of January 1, 2022

2,209

1,733

44,34429,392

77,679Balance as of December 31, 2022

3,832

2,325

61,86839,495

107,520

Balance as of December 31, 2023

6,373

3,042

83,12250,457

142,994(2) Material goodwill and intangible assets
The material goodwill and intangible assets recorded in the consolidated statement of financial position
primarily represents the goodwill recognized through the acquisition of BRIDGESTONE MOBILITY
SOLUTIONS B.V. and the carrying amounts of the goodwill are 62,619 million yen and 69,547 million
yen as of the previous fiscal year-end and the current fiscal year-end, respectively. In addition, thegoodwill recognized by this acquisition was allocated to cash generating units which were expected tobenefit from the synergies and belongs to WEBFLEET SOLUTIONS cash-generating unit and
BRIDGESTONE EUROPE cash-generating unit.

147

16. Impairment of Non-financial Assets(1) Impairment losses
For measuring impairment losses, the Group groups assets for business based on the categories, which
are adopted for internal management purposes, while grouping assets to be disposed of (assets planned
to be disposed of by retirement, sale, etc.) and idle assets individually.
Impairment losses of 19,333 million yen recognized in the previous fiscal year consist of 18,610 million
yen recorded as “other expenses” (of which, “business and plant restructuring expenses” are 1,118
million yen) and 724 million yen recorded as “profit (loss) from discontinued operations.”
The components of the impairment losses of 19,333 million yen by item are 16,739 million yen forproperty, plant and equipment, 1,538 million yen for goodwill and intangible assets, and 1,056 million
yen for others. The breakdown by segment (excluding the amount recorded in business and plant
restructuring expenses and profit (loss) from discontinued operations) is as follows:
The transfer of Russian business was completed in December 2023.
(Yen in millions)
Segments
Cash-generating unit

Russian tire business
Other
Total

China, AsiaPacific

Japan

–
1,959
1,959

–
1,797
1,797

Europe,Russia,Americas Middle East,
India andAfrica–13,581
155–
155
13,581

Total

13,581
3,911
17,492

Consolidated
total

Other

–
–
–

13,581
3,911
17,492The major reasons for the impairment losses are as follows:
As announced on March 14, 2022, the Company resolved to suspend production in Russia and tire
exports to Russia. As a result, the previously estimated revenue from the Russian tire business is notexpected to be realized at this time, and accordingly the carrying amount of assets for business use in the
Russian tire business was reduced by 13,581 million yen to the recoverable amount. The recoverable
amount of the asset was measured by its value in use, which was calculated by discounting future cash
flows at an after-tax discount rate of 15% or more. In addition, this impairment loss was recorded in“other expenses” in the consolidated statement of profit or loss.
The breakdown of these impairment losses is as follows:(Yen in millions)Cash-generating unit

Russian tire business

Segment

Europe, Russia, Middle East, India and Africa

Total

Type of assets

AmountBuildings and structures

4,948

Machinery and vehicles

5,051

Other

3,582
13,581

Impairment losses of 4,066 million yen recognized in the current fiscal year consist of 4,066 million yen
recorded as “other expenses” (of which, business and plant restructuring expenses are 2,233 millionyen). In recording these impairment losses, the carrying amounts have been reduced to the recoverable
amounts mainly for operating assets with reduced profitability, assets to be disposed of throughretirement or sale, and idle assets with no plans for use. The recoverable amounts of the assets are
principally measured at their fair value. The fair value has been classified as Level 3 in the hierarchy.
(2) Impairment test of cash-generating units containing goodwill
The Group conducts an impairment test on cash-generating units containing goodwill every period orwhenever there is any indication of impairment.
148

Among goodwill allocated to each cash-generating unit in the current fiscal year, the principal goodwill
is recognized in WEBFLEET SOLUTIONS cash-generating unit. In addition, out of the cash-generating
units to which goodwill has been allocated, the one with a carrying amount of materiality is
BRIDGESTONE EUROPE cash-generating unit. The impairment test conducted on each cashgenerating unit was done so as follows.
1) WEBFLEET SOLUTIONS cash-generating unit
The recoverable amount of goodwill in the impairment test is calculated based on value in use. The
value in use reflects past experience and external sources of information and is based on the Group’sbusiness plan for the next three years as approved by the management. After the three-year plan, theCompany discounts the future cash flows to the present value using an after-tax discount rate of 9.6%of the cash-generating unit, using the future growth rate reduced from 12.9% in the fourth year to
3.0% in the tenth year and the same 3.0% in and after the eleventh year as the continuous growth rateconsidering inflation.
The value in use in the previous fiscal year reflects past experience and external sources of
information and is based on the Group’s business plan for the next three years as approved by the
management. After the three-year plan, the Company discounts the future cash flows to the present
value using an after-tax discount rate of 8.9% of the cash-generating unit, using the future growth rate
reduced from 13.8% in the fourth year to 2.3% in the tenth year and the same 2.3% in and after theeleventh year as the continuous growth rate considering inflation.
There is a risk of impairment when key assumptions used for the impairment test change. However, as
the value in use sufficiently exceeds the carrying amount of the cash-generating unit, the Group
determines that it is highly unlikely that the value in use would fall below the carrying amount even if
key assumptions used in the impairment test fluctuated by a reasonably foreseeable extent.
In addition, out of the total goodwill related to the acquisition of BRIDGESTONE MOBILITY
SOLUTIONS B.V. of 69,547 million yen (as of the previous fiscal year-end: 62,619 million yen), thecarrying amount allocated to WEBFLEET SOLUTIONS cash-generating unit as of the current fiscal
year-end is 62,267 million yen (as of the previous fiscal year-end: 56,065 million yen). The Group
determines that the amount of the goodwill allocated to cash-generating units other than WEBFLEETSOLUTIONS is not material compared to the amount recorded in the consolidated financial
statements.
2) BRIDGESTONE EUROPE cash-generating unit
The recoverable amount of goodwill in the impairment test is calculated based on value in use. The
value in use reflects past experience and external sources of information and is based on the Group’sbusiness plan for the next three years as approved by the management. After the three-year plan, theCompany discounts the future cash flows to the present value using an after-tax discount rate of 10.3%of the cash-generating unit, using the future growth rate reduced from 3.3% in the fourth year to 2.2%in the sixth year and the same 2.2% in and after the seventh year as the continuous growth rateconsidering inflation.
The value in use is higher than the carrying amount; however, if the discount rate increases by 0.2%,
there is a possibility of incurring an impairment loss.
Non-financial assets of 292,758 million yen, including goodwill of 14,469 million yen, was recorded
in BRIDGESTONE EUROPE cash-generating unit.

149

17. Lease Transactions
LesseeThe Group enters into lease contracts for buildings and structures, etc.
(1) Items related to right-of-use assets
The carrying amount, depreciation and additions to “Right-of-use assets” are as follows:
Carrying amounts

Buildings and structures

Other

Total

Yen in millions

Yen in millions

Yen in millions

Balance as of December 31, 2022

244,282

56,996301,278

Balance as of December 31, 2023

253,548

65,587319,135

Depreciation (Note)

Buildings and structures

Other

Total

Yen in millions

Yen in millions

Yen in millions

Previous fiscal year
(Year ended December 31, 2022)

50,945

12,87363,818Current fiscal year
(Year ended December 31, 2023)

54,045

12,577

66,622(Note) Depreciation of right-of-use assets is included in “Cost of sales,” “Selling, general and administrative
expenses” and “Profit (loss) from discontinued operations” in the consolidated statement of profit orloss.

Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)

Yen in millions

Yen in millions

Additions to right-of-use assets

57,32669,740Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)

Yen in millions

Yen in millions(2) Expenses and cash outflows for leases
The lease expenses are as follows:

Interest expense on lease liabilities
Recognition exemptions: expenses for short-term leases

7,480
1,473

8,536
1,175

Recognition exemptions: expenses for leases of low-value
assets342

381

Expense relating to variable lease payments not included in
the measurement of lease liabilities

4,243

2,387

Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)

Yen in millions

Yen in millions

Total cash outflows for leases are as follows:

Total cash outflow for leases

71,886150

72,276

(3) Maturity analysis for lease liabilities
The details are presented in Note “35. Financial Instruments (4) Liquidity risk management.”
18. Income Taxes(1) Deferred tax assets and deferred tax liabilities
The breakdown of items giving rise to “Deferred tax assets” and “Deferred tax liabilities” and thechanges thereof are as follows:
Previous fiscal year (Year ended December 31, 2022)
As of January
1, 2022

Cumulative
effects ofchanges inaccounting
policies

Restated
Recognized in
Recognized inbalance as ofothernet profit orJanuary 1,
comprehensive
loss
2022
income

As ofDecember 31,
2022

Other

Yen inYen inYen inYen inYen inYen inYen inmillions

millions

millions

millions

millions

millions

millions

Deferred tax assets
Accrued expenses
Lease liabilities

14,371––
71,46814,371
71,468(1,344)
94

–
–

3,182
420

16,20971,982Retirement
benefit liabilities

36,538–36,538(1,309)(3,275)

3,056

35,01016,412–

16,412

10,871––

27,283

13,984–

13,984(3,089)–(332)

10,56362,095(2,794)59,301(8,612)

1,480

1,845

54,014143,400

68,673

212,073(3,390)(1,795)8,172

215,061

70,574–70,574(9,903)–

8,995

69,666–

68,461

68,461

(18)

–

251

68,69422,358–22,358–(6,708)–15,650

14,118–

14,118

(714)

–

–

13,404

3,369

–

3,369

477

572

271

4,689

110,419

68,461

178,880(10,158)(6,136)

9,517

172,103

32,981

212

33,193

6,768

4,341

(1,345)42,958

Unrealized gains
Unused tax losses
carryforward
Other
Total deferred tax
assetsDeferred tax
liabilities
Property, plantand equipment,
and intangible
assetsRight-of-use
assetsFinancial assets
Reserve foradvanceddepreciation of
fixed assets
Other
Total deferred tax
liabilities
Net deferred tax
assets151

Current fiscal year (Year ended December 31, 2023)
As of January 1, Recognized in2023
net profit or loss

Recognized inothercomprehensive
incomeOther

As of December
31, 2023

Yen in millions

Yen in millions

Yen in millions

Yen in millions

Yen in millions

Lease liabilities
Retirement benefit liabilities

71,98235,0104,097(1,790)

–
2,739

–
2,026

76,07837,985

Unrealized gains
Unused tax losses carryforward

27,283
10,563

7,336(6,374)

–
–

–
3,292

34,619
7,481

Deferred tax assets

Other (Note 1)

70,223

11,044(3,748)2,211

79,731

Total deferred tax assets

215,061

14,313(1,009)7,529

235,894

69,666(5,302)–

6,304

70,668Deferred tax liabilities
Property, plant and equipment, andintangible assets
Right-of-use assets

68,694

3,615

–

–

72,309Financial assets
Other (Note 2)

15,65018,093

–
2,532

(559)
(32)

–
39

15,091
20,632

Total deferred tax liabilities

172,103

845

(591)

6,343

178,700

42,95813,468

(418)

1,186

57,195Net deferred tax assets(Note 1)

“Accrued expenses” in the current fiscal year are included in “Other” under deferred tax assets.

(Note 2)

“Reserve for advanced depreciation of fixed assets” in the current fiscal year is included in“Other” under deferred tax liabilities.

The breakdown of deferred tax assets and liabilities in the consolidated statement of financial position is
as follows:
Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Yen in millions

Yen in millions

Deferred tax assets

82,01088,141

Deferred tax liabilities

39,05330,946

Net deferred tax assets

42,95857,195

Deferred tax assets recognized by taxable entities that have suffered a loss in either the previous fiscal
year or the current fiscal year are 972 million yen and 574 million yen as of the previous fiscal year-end
and the current fiscal year-end, respectively. For recognizing these deferred tax assets, the Groupconsiders if deductible temporary differences and a part or all of unused tax losses carryforward can beused for future taxable income. For an assessment of the recoverability of deferred tax assets, the Groupconsiders deferred tax liabilities planned to be reversed and expected future taxable income and tax
planning. As for recognition of deferred tax assets, the Group determines it is highly probable that thesetax benefits will be realized based on the taxable income level in the past and the prediction of futuretaxable income in the period during which deferred tax assets can be recognized.
The deductible temporary differences and unused tax losses carryforward for which deferred tax assets
were not recognized are as follows:(Yen in millions)
Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Deductible temporary differences

133,241

95,084

Unused tax losses carryforward

190,404

218,578

323,645

313,662

Total

152

The unused tax losses carryforward and unused tax credits carryforward for which deferred tax assets
were not recognized will expire as follows:(Yen in millions)
Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Unused tax losses carryforward
Within five years

36,08972,951After five years

154,315

145,627

190,404

218,578

Within five years

1,105

2,855

After five years

5,788

4,384

6,893

7,240

Total unused tax losses carryforward
Unused tax credits carryforward

Total unused tax credits carryforward

Total temporary differences arising from the investments in subsidiaries and associates or interests injoint arrangements, which are not recognized as deferred tax liabilities as of the previous fiscal year-end
and the current fiscal year-end amount to 423,009 million yen and 536,023 million yen, respectively.
Deferred tax liabilities related to the above temporary differences are not recognized as the Group is able
to control the timing of the reversal of the temporary differences and it is probable that they will notmake such a reversal in the foreseeable future.
(2) Income tax expense
The breakdown of “Income tax expense” is as follows.
Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)

Yen in millions

Yen in millions

Current income tax expense

131,651

Deferred income tax expense
Total income tax expense

124,142(19,138)(12,966)

112,513111,177

Income taxes recognized on sale of the financial assets measured at fair value through othercomprehensive income are as follows:
Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)

Yen in millions

Yen in millions

Income tax expense

148

1,840

(3) Reconciliation of effective tax rate
The breakdown of the primary factors contributing to differences between the statutory effective tax
rates and the tax burden ratio of income tax after adjustments for tax effect accounting is as follows:
The Company is subject to corporation tax, inhabitant tax and business tax. The statutory effective tax
rates calculated based on these taxes are 30.6% and 30.6% for the previous fiscal year and the current
fiscal year, respectively. However, overseas consolidated subsidiaries are subject to local corporate andother taxes.

153Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)%%

Statutory effective tax rate
(Adjustments)

30.6

30.6

Effects from reassessment of the recoverability ofdeferred tax assets

0.4

2.5

Tax credits for experiment and research expenses atcompanies in Japan

(0.1)

(1.2)

Differences in applicable tax rates of consolidated
subsidiaries

(4.1)

(5.1)

Tax adjustments for overseas subsidiaries
Other

(1.2)
1.0

(1.9)
0.1

26.6

25.0

Tax burden ratio of income tax after adjustments for tax
effect accounting

The tax burden ratios of income tax after adjustments for tax effect accounting, which factors in
discontinued operations, for the previous fiscal year and the current fiscal year were 23.3% and 24.9%,
respectively.
(4) Uncertain income tax positions
As for the repayment of capital received from BRIDGESTONE AMERICAS, INC., a consolidated
subsidiary, in fiscal year 2021, the Company accounted for the transaction by recognizing deductible
expenses as loss on transfer of shares for tax purposes. In fiscal year 2021, the Company excluded somedeductible expenses to calculate its taxable income, for accounting purposes, with respect to this matter
which gives rise to some uncertain tax treatments under the Japan’s tax law. The Company had engaged
third-party legal, tax professionals, etc. to consider plausible tax treatments and estimated its taxable
income using either the expected value method or the most likely amount method for the effect of
uncertainties considering various scenarios and assumptions. As a result, although an effect of 91,100
million yen in total would be imposed on a decrease in income taxes payable and an increase in deferred
tax assets if all the deductible expenses were included in calculating taxable income, the Company
lowered its deferred tax assets by 60,000 million yen in fiscal year 2021, relative to amounts under the
aforementioned accounting treatment, and also continued the same accounting treatment in the previous
fiscal year. Furthermore, in the current fiscal year, there was also no change in the judgment on thismatter from fiscal year 2021. However, due to progress in use of unused tax losses carryforward, theCompany has lowered its deferred tax assets by 27,241 million yen and increased its income taxes
payable by 32,759 million yen in the current fiscal year, relative to amounts in the case where all the
deductible expenses were included in calculating taxable income.
A potential situation whereby such uncertain tax treatment differs from the final interpretation of Japan’s
tax law according to the tax authorities could materially affect the income tax expense amount of thesubsequent fiscal year.
19. Trade and Other Payables
The breakdown of “Trade and other payables” is as follows:
Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Yen in millions

Yen in millions

Notes and accounts payable

296,619

269,287

Accounts payable - otherAccrued expenses

189,108
121,771

207,793
122,160

607,498599,240

Total

154

Trade and other payables (excluding accrued expenses) are classified as financial liabilities measured atamortized cost.
20. Bonds and Borrowings (Including Other Financial Liabilities)(1) Breakdown of financial liabilities
The breakdown of “Bonds and borrowings,” “Lease liabilities” and “Other financial liabilities” is asfollows:
Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Average interest
rate(Note 1)

Yen in millions

Yen in millions%

Short-term borrowings
Current portion of longterm borrowings
Current portion of bonds

Repayment
deadline

92,247124,073

7.3–

15,62034,0144.3––

99,9880.2–

Long-term borrowings

35,92830,024

3.9

June 2025 –June 2031

Bonds

309,656

209,765

0.3

April 2026 –April 2029

Short-term lease liabilities

56,03361,308

2.9

Long-term lease liabilities

257,684

270,989

2.8

Other

52,14859,560–

October 2105–

819,315889,720––

Current liabilities:

197,973

369,041––

Non-current liabilities:

621,343

520,679––

819,315889,720

–

–

Total

Total

–
January 2025 –(Note 1)

“Average interest rate” represents the weighted average interest rates for the interest rates andbalances as of the end of the current fiscal year.

(Note 2)

Bonds and borrowings are categorized as financial liabilities measured at amortized cost.

The terms for the different bonds that have been issued are summarized below:(Yen in millions)Company
name

Issue

The 10th
Bridgestone
unsecured
Corporation
bonds

Previous fiscal year Current fiscal year Interest
Issuance date (As of December 31, (As of December 31,
rate
2022)
2023)
(%)

Collateral

Maturity date

April 21, 2017

49,97749,9940.2

None

April 19, 2024

April 21, 201759,93059,9460.3

None

April 21, 2027

April 19, 2019

49,97449,9930.1

None

April 19, 2024

The 13th
Bridgestone
unsecured
Corporation
bonds

April 19, 201949,941

49,9590.2

None

April 17, 2026

The 14th
Bridgestone
unsecured
Corporation
bonds

April 19, 201999,834

99,8600.4

None

April 19, 2029–

309,656

309,752––

Bridgestone

The 11th

Corporation

unsecuredbonds

Bridgestone

The 12th
unsecured

Corporation

bonds

Total

155

–

(2) Assets pledged as collateral for liabilities
Assets pledged as collateral are as follows:
Assets pledged as collateralPrevious fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Yen in millions

Yen in millions

Cash and cash equivalents

219

234

Property, plant and equipment

493

492

712

726

Total

21. Provisions“Provisions” is recorded as current liabilities and non-current liabilities in the consolidated statement offinancial position.
The breakdown of “Provisions” and the changes are as follows:
Previous fiscal year (Year ended December 31, 2022)
Provision forcompensation for Provision for loss
Provision forindustrial
product warranties
on litigation
accidents

Other

Total

Yen in millions

Yen in millions

Yen in millions

Yen in millions

Yen in millions

Balance as of January 1, 2022

12,01819,601

6,797

35,81574,231

Increase during period
Decrease (used)

9,089(11,377)

12,081(9,291)

21,181(5,469)9,180(10,977)

51,531(37,114)

Decrease (reversed)
Exchange differences

(594)
1,837

(2,366)
667

(138)
229

(2,724)
2,088(5,822)
4,821

879

413

(72)

50

1,270

11,852

21,10522,52833,432

88,917

Other
Balance as of December 31,
2022

Current fiscal year (Year ended December 31, 2023)
Provision forcompensation for Provision for loss
Provision forindustrial
product warranties
on litigation
accidents

Other

Total

Yen in millions

Yen in millions

Yen in millions

Yen in millions

Yen in millions

Balance as of January 1, 2023
Increase during period

11,852
12,494

21,105
12,432

22,5284,151

33,432
9,972

88,91739,049Decrease (used)
Decrease (reversed)(11,806)(1,230)(17,317)(224)(8,930)(2,848)(9,676)(2,875)(47,729)(7,177)

Exchange differences
Other

820
–

(773)
280

572
–

1,554
231

2,173
511

12,13015,503

15,47332,63875,744

Balance as of December 31,
2023(1) Provision for compensation for industrial accidents
The Group estimates and records an amount based on past and current experience to prepare for thepayment of the medical expenses, the absence from work compensation, etc. incurred as a result of156

industrial accidents. The outflow of the economic benefits is supposed to occur mainly during the period
one year after the end of the current fiscal year.
(2) Provision for loss on litigation
To prepare for the expenditures of litigation-related expenses, the Group estimates and records anamount of compensation for damages, settlement package, etc. that is currently expected to be incurredin the future. The outflow of the economic benefits is supposed to occur mainly within one year from theend of the current fiscal year.
(3) Provision for product warranties
To prepare for the expenditures for after-sales and other services for products sold, the Group estimatesand records an amount to be incurred based on past experience. The outflow of the economic benefits is
supposed to occur mainly within one year from the end of the current fiscal year.
(4) Other“Other” includes asset retirement obligations, provision for environmental expenses, etc.
22. Other Current Liabilities
The breakdown of “Other current liabilities” is as follows:
Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Yen in millions

Yen in millions

Bonuses to officers and employees

50,16640,857

Refund liabilities
Provision for unused paid absences

42,02825,13740,26826,429Contract liabilities
Other

18,53237,477

21,55639,748173,340

168,858

Total

The details of contract liabilities are presented in Note “26. Revenue.”
23. Employee Benefits(1) Post-employment benefits
The Group has adopted both funded and unfunded defined benefit plans and defined contribution plans
as retirement benefits for its employees. The funded defined benefit plans are managed by pension funds
that are legally segregated from the Group. The board of directors of pension funds and pension trustees
are required by law to act in the best interests of the participants and are responsible for managing theplan assets in accordance with the prescribed policies.
The Group’s defined benefit plans are exposed to the following risks:(i) Investment risk
The present value of the defined benefit obligations is calculated based on a discount rate that isdetermined by reference to market yields on high-grade corporate bonds at the end of fiscal year.
In the event that the investment yields for the plan assets fall below the discount rate, there is arisk of reduction in equity because of the worsened funded status.

157

(ii) Interest rate risk
In the event that the discount rate is reduced due to a decline in market yields on high-grade
corporate bonds, the present value of the defined benefit obligations increases, resulting in a riskof reduction in equity because of the worsened funded status.
1) Reconciliation of defined benefit obligations
The changes in the defined benefit obligations are as follows:
Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)

Yen in millions

Yen in millions

Present value of defined benefit obligations at beginning of

737,616

616,474

16,041

12,456

15,65424,316

Actuarial gains and losses arising from changes indemographic assumptions

1,422

(99)

Actuarial gains and losses arising from changes infinancial assumptions(138,925)

7,108Actuarial gains and losses arising from experience
adjustments

1,681

3,385

Past service cost and settlement of plan
Benefits paid

(18,635)(71,314)(5,277)(51,882)

Exchange differences on translation of foreign operations
Other

71,884
1,050

30,6501,804

616,474

638,935

period (Note)
Service cost
Interest expense
Remeasurements

Present value of defined benefit obligations at end of period(Note)(Note)

The weighted-average durations of the defined benefit obligations of the Group are 10.9 years and10.9 years as of the previous fiscal year-end and the current fiscal year-end, respectively.

2) Reconciliation of plan assets
The changes in the plan assets are as follows:
Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)

Yen in millions

Yen in millions

Fair value of the plan assets at beginning of period

594,285

490,577

12,513

19,627Return on plan assets
Contribution from employers (Note 1) (Note 2)(115,046)
14,697

14,50816,445

Benefits paid
Settlement of plan

(66,676)–(45,088)(245)

Exchange differences on translation of foreign operations
Other

60,860(10,056)

24,119(1,812)490,577

518,131

Interest revenue
Remeasurements

Fair value of the plan assets at end of period(Note 1)The Group and its pension funds, in accordance with the laws and regulations, periodicallyconduct financial verifications and recalculate the amount of contributions for the purpose of
appropriating funds for future benefit accruals and maintaining a balanced pension fund in case ofa deficit.
158

(Note 2)

The Group plans to make a contribution of 16,941 million yen in the subsequent fiscal year.

3) Reconciliation of defined benefit obligations and plan assets
The relationship between the defined benefit obligations, the plan assets and the defined benefit
liabilities (assets) in the consolidated statement of financial position is as follows:
Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Yen in millions

Yen in millions

Present value of the funded defined benefit obligations
Fair value of the plan assets

549,374(490,577)

570,703(518,131)

Subtotal

58,79752,572Present value of the unfunded defined benefit obligations
Effect of asset ceiling

67,0999,782

68,232
24,433

Defined benefit liabilities (assets)

135,678

145,237

Amounts on the consolidated statement of financial position
Retirement benefit liabilities

155,112

153,511(19,434)(8,274)

135,678

145,237

Retirement benefit assets
Defined benefit liabilities (assets) in the consolidated
statement of financial position

4) Major components of plan assets
The major components of plan assets by category are as follows:
Previous fiscal year
(As of December 31, 2022)
Quoted price in active markets
QuotedCurrent fiscal year
(As of December 31, 2023)
Total

Unquoted

Quoted price in active markets
QuotedTotal

Unquoted

Yen in millions Yen in millions Yen in millions Yen in millions Yen in millions Yen in millions
Debt instruments
Japan
Overseas
Equity instruments
Japan
Overseas
Cash and cash equivalents
Alternative investments (Note)
Other
Total

(Note)

221,6498,495
213,154
26,776856
25,92020,987
51,123851
321,386

7,107
2,434
4,673
9,770
–
9,770
20,91978,616
52,779169,191

228,756
10,929217,827
36,546856
35,69041,906
129,739
53,630490,577

245,575
9,338
236,237
29,133
1,073
28,06025,88150,825
55351,469

12,504
2,161
10,343
12,927–
12,927
15,74270,59554,894
166,662

258,079
11,499246,580
42,060
1,073
40,987
41,623
121,420
54,949518,131

Alternative investments include investments, such as trusteed pension assets, real estate fund, andhedge fund, etc.
The investment management policy of the Group for the major plans is as follows:(Japan)The Company’s policy aims for managing plan assets to secure stable returns over the medium tolong term so that it can ensure payment of defined benefit obligations in the future, in accordancewith internal regulations. More specifically, the Group sets a target return and asset allocation that iswithin the range of tolerable risk defined annually, and manages its plan assets by maintaining thisallocation. When assessing the asset allocation, the Group examines whether to introduce the type ofplan assets that is closely linked to changes in defined benefit obligations.
Furthermore, in the event of an unexpected event in the market environment, the Group is able totemporarily adjust the weighting of risk assets in accordance with the internal regulations.
159

(Overseas)
The policies for managing plan assets of these foreign subsidiaries are established by pension
trustees and the managements of these foreign subsidiaries in accordance with the laws of eachcountry. The objective of such policies is to secure investment income that exceeds the changes inthe value of liabilities while managing the risks arising from defined benefit obligations.
The core part of the plan assets is invested in bonds linked to the defined benefit obligations. The
remaining part of the plan assets is invested mainly in the stocks to earn long-term income.
5) Reconciliation of the effect of the asset ceiling
The changes in the effect of the asset ceiling are as follows:
Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)

Yen in millions

Yen in millions

Effect of asset ceiling at beginning of period
Remeasurements
Change in the effect of asset ceiling
Exchange differences on translation of foreign operations
Effect of asset ceiling at end of period

396

9,782

9,367
19

14,377274

9,782

24,4336) Items related to actuarial assumptions
Significant actuarial assumptions for each fiscal year are as follows:
Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)%%

Discount rate

(Note)

4.0

3.9

Valuation of the defined benefit obligations includes a judgment of future uncertain events.
Sensitivity of the defined benefit obligation to changes in the major base rate as of the end of thecurrent fiscal year is as follows: Although the sensitivity assumes that all the other variables
remain constant, practically they do not always change independently. Negative figures represent a
decrease in the defined benefit obligations and positive figures an increase in them.
Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

0.5% increase

Yen in millions(45,285)

Yen in millions(46,418)

0.5% decrease

55,75550,871

Changes in base rate

Discount rate7) Defined contribution plan
The amounts of contributions paid to the defined contribution plan are 19,439 million yen and
20,350 million yen for the previous fiscal year and the current fiscal year, respectively.

160

(2) Employee benefit expenses
Employee benefit expenses that are included in “Cost of sales,” “Selling, general and administrative
expenses,” “Other expenses,” “Finance costs” and “Profit (loss) from discontinued operations” in the
consolidated statement of profit or loss are as follows:
Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)

Yen in millions

Yen in millions

Employee benefit expenses

8,915

12,985

24. Equity and Other Components of Equity(1) Common stock and capital surplus
The Companies Act provides that at least half of the paid-in capital shall be appropriated as common
stock, and the remaining amount may be appropriated as capital reserve within capital surplus. The
Companies Act also provides that capital reserve may be appropriated as common stock pursuant to a
resolution at the shareholders’ meeting.
1) Number of shares authorized
The numbers of authorized shares are 1,450,000,000 shares and 1,450,000,000 shares as of theprevious fiscal year-end and the current fiscal year-end, respectively.
2) Number of shares issued and fully paid
The changes in the number of shares issued and the balances of common stock and capital surplus
are as follows:

Beginning of theprevious fiscal year

Number of issued shares ofcommon stock

Commonstock

Capital surplus

SharesYen in millions

Yen in millions

713,698,221

126,354

122,126––(2,609)713,698,221

126,354

119,517––783

713,698,221

126,354

120,300(As of January 1, 2022)
Increase (Decrease)
Previous fiscal year
(As of December 31, 2022)
Increase (Decrease)
Current fiscal year
(As of December 31, 2023)(Note)The shares issued by the Company are shares of common stock with no par value and have norestrictions on any rights.

161

(2) Treasury stock
The changes in the number of shares and balance of treasury stock are as follows:
Number of shares

AmountSharesYen in millions

Beginning of theprevious fiscal year

9,434,214

38,123(As of January 1, 2022)
Increase (decrease) (Note 2)

19,914,524

98,69029,348,738

136,814(301,567)(1,405)29,047,171

135,409

Previous fiscal year
(As of December 31, 2022)
Increase (decrease) (Note 3)
Current fiscal year
(As of December 31, 2023)(Note 1)The Company has adopted the stock option and appropriated shares of treasury stock for thedelivery of shares upon exercise of these options. The terms of the contract and the amounts, etc.
are presented in Note “34. Share-based Payment.”(Note 2)The main factors of the increase (decrease) in treasury stock during the previous fiscal year werean increase due to acquisition based on a resolution of the Board of Directors, a decrease due toexercise of stock options, and a decrease due to disposal as PSUs and restricted share-based
remuneration. The number of treasury stock acquired based on the resolution of the Board of
Directors in the previous fiscal year was 20,225,300 shares and the total acquisition amount was
100,000 million yen.

(Note 3)The main factors of the increase (decrease) in treasury stock during the current fiscal year were an
increase due to purchase of shares less than one unit, a decrease due to exercise of stock options,and a decrease due to disposal as restricted share-based remuneration, PSUs, and RSUs.

(3) Other components of equity
1) Stock acquisition rights
The Company has adopted the stock option plan and issued stock acquisition rights in accordancewith the Companies Act. The terms of the contract and the amounts, etc. are presented in Note “34.
Share-based Payment.”
2) Exchange differences on translation of foreign operations
The exchange differences on translation of foreign operations occur when the financial statements ofthe foreign operations prepared using foreign currencies are consolidated.
3) Effective portion of change in fair value of cash flow hedges
The Company hedges the fluctuation risk of variability in future cash flows through hedges, and thisis the portion of the changes in fair value of the derivative instruments designated as cash flow
hedges, which are deemed to be effective.
4) Net change in fair value of financial assets measured through other comprehensive income
This is the valuation difference of the fair values of financial assets measured through othercomprehensive income.
5) Remeasurements of defined benefit plans
Remeasurements of defined benefit plans include actuarial gains and losses that arise from thepresent value of defined benefit obligations, the return on plan assets (except for amounts included162

in net interest), and changes in the effect of the asset ceiling (except for amounts included in net
interest). They are recognized in other comprehensive income when they arise, and reclassified fromother components of equity to retained earnings immediately.
(4) Retained earnings
The Companies Act provides that an amount equal to 10% of the dividends paid from surplus shall betransferred to capital reserve and legal retained earnings until the aggregate amount of capital reserve
and legal retained earnings equals 25% of the nominal value of common stock. The amount accumulated
in legal retained earnings may be used to offset deficit. Furthermore, such legal retained earnings may bereversed pursuant to a resolution at the shareholders’ meeting.
25. Dividends(1) The amount of dividends paid
Previous fiscal year (Year ended December 31, 2022)
Type(Resolution)

Total dividends

Dividend per share

Yen in millions

Yen

Record date

Effective date

Annual Shareholders’ Meeting,March 23, 2022

CommonStock59,86385

December 31,
2021

March 24, 2022

Board of Directors’ Meeting,
August 10, 2022

CommonStock59,18085

June 30, 2022

September 1,
2022

Total dividends

Dividend per share

Record date

Effective date

Yen in millions

Yen

Current fiscal year (Year ended December 31, 2023)
Type(Resolution)
Annual Shareholders’ Meeting,March 28, 2023

CommonStock61,59290

December 31,
2022

March 29, 2023

Board of Directors’ Meeting,
August 9, 2023

CommonStock68,462100

June 30, 2023

September 1,
2023(2) Dividends that will be effective in the subsequent fiscal year of the record datePrevious fiscal year (Year ended December 31, 2022)
Type(Resolution)
Annual Shareholders’ Meeting,CommonMarch 28, 2023

Stock

Total dividends

Dividend per share

Yen in millions

Yen

61,592

90

Record date

December 31,
2022

Effective date

March 29, 2023

Current fiscal year (Year ended December 31, 2023)
Type(Resolution)
Annual Shareholders’ Meeting,March 26, 2024

Total dividends

Dividend per share

Yen in millions

Yen

CommonStock68,465163

100

Record date

Effective date

December 31,
2023

March 27, 2024

26. Revenue(1) Disaggregation of revenue
The breakdown of revenue from continuing operations is as follows.
Previous fiscal year (Year ended December 31, 2022)(Yen in millions)
Reportable segments
Europe,Japan

Russia,Middle East,
China, AsiaAmericas
Pacific
India andAfricaTotal

Corporate or Consoli-

Otherelimination dated total

669,476
220,215

376,713–

1,921,055
49,221(Note 4)856,443–

Total external revenue

889,692

376,713

1,970,276

856,443

4,093,124

16,90740

4,110,070

Revenue recognized fromcontracts with customers

867,200

376,713

1,964,477

843,522

4,051,912

16,90740

4,068,858

Revenue recognized fromother sources (Note 3)

22,492–

5,799

12,921

41,212––

41,212Tires (Note 1)
Other (Note 2)

3,823,688
269,436

15,813
1,094

40–

3,839,540
270,530(Note 1)

“Tires” includes the premium tire business and solutions business that the Company operates in.

(Note 2)“Other” includes chemical and industrial products and diversified products businesses that theCompany operates in.

(Note 3)

Revenue recognized from other sources includes lease income based on IFRS 16.

(Note 4)

Transfer of the Russian business was completed in December 2023.

Current fiscal year (Year ended December 31, 2023)(Yen in millions)
Reportable segments
Europe,Russia,Japan

716,935

Tires (Note 1)
Other (Note 2)

China, AsiaMiddle East,
Americas
Pacific
India and398,135

2,003,081

Africa(Note 4)
888,479

Total

4,006,630

Corporate or Consoli-

Otherelimination dated total

16,24923

4,022,902

229,613–59,992–289,605

1,293–

290,898

Total external revenue

946,547

398,135

2,063,073

888,479

4,296,235

17,54323

4,313,800

Revenue recognized fromcontracts with customers

915,826

398,135

2,055,923

876,578

4,246,462

17,54323

4,264,028

30,722–

7,150

11,90049,772––

49,772

Revenue recognized fromother sources (Note 3)(Note 1)

“Tires” includes the premium tire business and solutions business that the Company operates in.

(Note 2)“Other” includes chemical and industrial products and diversified products businesses that theCompany operates in.

(Note 3)

Revenue recognized from other sources includes lease income based on IFRS 16.

(Note 4)

Transfer of the Russian business was completed in December 2023.

164

(2) Contract balances
Contract balances of the Group consist of receivables, contract assets and contract liabilities arising fromcontracts with customers. In the consolidated statement of financial position, receivables arising fromcontracts with customers are presented as “Trade and other receivables,” while the contract assets andcontract liabilities are as follows:
Beginning of theprevious fiscal year
(As of January 1, 2022)

Previous fiscal year
(As of December 31,
2022)(Yen in millions)
Current fiscal year
(As of December 31,
2023)

Contract assets

1,851

4,953

9,291

Contract liabilities

18,404

23,117

27,377Of the amount of revenue recognized in the previous fiscal year and current fiscal year, the amounts
included in the balance of contract liabilities at the beginning of the fiscal year were 14,548 million yen
and 18,532 million yen, respectively. The amount of revenue recognized in the current fiscal year fromperformance obligations satisfied in the previous periods is not material.
The contract assets are presented as “Other current assets” and “Other non-current assets” in the
consolidated statement of financial position.
The contract assets primarily relate to unbilled accounts receivable on product design and development
for customers.
Generally, contract assets increase when the Company transfers goods or services to customers before
the customers pay consideration or the payment is due (excluding receivables for which the right toconsideration is unconditional), and decrease when the Company bills customers.
The contract liabilities are presented as “Other current liabilities” and “Other non-current liabilities” inthe consolidated statement of financial position.
The contract liabilities primarily relate to advances received from customers in association withmaintenance services for automobiles.
Generally, contract liabilities increase when the Company receives consideration from customers before
the Company transfers goods or services to the customers, and decrease when the Company satisfies its
performance obligations.
(3) Transaction price allocated to the remaining performance obligations
The amounts of revenue from continuing operations related to the unsatisfied (or partially unsatisfied)
performance obligations that are expected to be recognized in the future at the end of the fiscal year are
as follows:(Yen in millions)
Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Within one year

29,71932,030Over one year and within five years

51,79921,795As the Group has applied the practical expedient provided in paragraph 121 of IFRS 15, it does notdisclose information about the remaining performance obligation that has an original expected durationof one year or less. Among consideration from contracts with customers, there is no significant amountthat is not included in transaction price.

165

27. Selling, General and Administrative Expenses
The breakdown of “Selling, general and administrative expenses” is as follows:(Yen in millions)
Previous fiscal year
Current fiscal year
(Year ended December 31, 2022) (Year ended December 31, 2023)
Freight

264,847

222,461

Advertising and sales promotional expenses

106,91391,505

Employee benefit expenses

325,507346,249

Depreciation and amortization

101,406

112,836

Research and development expenses (Note)

112,192

121,993

Other

247,660

286,439

1,158,523

1,181,482

Total(Note) All research and development expenses recognized as expenses are included in selling, general andadministrative expenses.
28. Other Income and Other Expenses
The breakdown of “Other income” and “Other expenses” is as follows:(1) Other income(Yen in millions)
Previous fiscal year
Current fiscal year
(Year ended December 31, 2022) (Year ended December 31, 2023)(Note 1)

17,322Gain on sale of fixed assets

14,246

Business and plant restructuring income (Note 2)

4,942

8,645

Insurance claim income

4,596

6,832

Other

15,327

6,394

39,11139,193

Total(Note 1) Mainly relates to gains on the sale of land.
(Note 2) The breakdown of “Business and plant restructuring income” is presented in Note “6. Operating
Segments.”166

(2) Other expenses(Yen in millions)
Previous fiscal year
Current fiscal year
(Year ended December 31, 2022) (Year ended December 31, 2023)
Business and plant restructuring expenses (Note 1)

7,435

17,921

Removal and disassembly expense

2,876

3,895

Loss on retirement of fixed assets

2,576

3,225

(Note 2) 17,492

1,833

2,159

1,637

32,53828,509Impairment losses
Other
Total

(Note 1) The breakdown of “Business and plant restructuring expenses” is presented in Note “6. Operating
Segments.”(Note 2) The breakdown of “Impairment losses” is presented in Note “16. Impairment of Non-financial
Assets.”29. Finance Income and Finance Costs
The breakdown of “Finance income” and “Finance costs” is as follows:(1) Finance income(Yen in millions)
Previous fiscal year
Current fiscal year
(Year ended December 31, 2022) (Year ended December 31, 2023)
Interest income (Note)

15,70829,468Dividend income (Note)

2,224

1,541

351

4,376

18,28335,385

Other
Total

(2) Finance costs(Yen in millions)
Previous fiscal year
Current fiscal year
(Year ended December 31, 2022) (Year ended December 31, 2023)
Interest expenses (Note)

14,122

21,031

Foreign currency exchange loss

19,05947,375

Other

8,717

9,940

41,89878,346

Total(Note)

Interest income and interest expenses are in relation to financial assets and financial liabilities
measured at amortized cost.
In addition, dividend income is in relation to financial assets measured at fair value through othercomprehensive income.

167

30. Other Comprehensive Income
The analysis of “Other comprehensive income” by item in terms of the amount that occurred during eachfiscal year, the amount reclassified to profit or loss and the impact of tax effects are as follows:
Previous fiscal year (Year ended December 31, 2022)
Amount that
occurred during
the period

Reclassification
Before tax effectadjustment

Yen in millions

Yen in millions(28,340)

Tax effect

After tax effectYen in millions

Yen in millions

Yen in millions–(28,340)

8,607(19,733)

11,332–

11,332(3,275)

8,057

(0)

–

(0)

–

(0)

(17,009)–(17,009)

5,332(11,677)

258,117–

258,117–

258,117(8,312)

12,105

3,793(1,089)2,704

10,449(230)

10,220–

10,220Total of items that may bereclassified to profit or loss

260,255

11,875272,130(1,089)271,041

Total

243,246

11,875

255,1214,243

259,364

Items that will not be reclassified to
profit or loss
Net change in fair value of financial
assets measured through othercomprehensive income
Remeasurements of defined benefit
plans
Share of other comprehensive incomeof investments accounted for using
equity method
Total of items that will not bereclassified to profit or loss
Items that may be reclassified to profit
or loss
Exchange differences on translationof foreign operations
Effective portion of change in fairvalue of cash flow hedges
Share of other comprehensive incomeof investments accounted for using
equity method

168

Current fiscal year (Year ended December 31, 2023)
Amount that
occurred during
the period

Reclassification
Before tax effectadjustment

Yen in millions

Yen in millions

18,245

Tax effect

After tax effectYen in millions

Yen in millions

Yen in millions–

18,245(5,552)

12,693(11,106)–(11,106)

2,739(8,367)

(2)

–

(2)

–

(2)

7,136

–

7,136

(2,813)

4,324

181,184

3,261

184,445–

184,445(11,311)

9,903(1,409)

409

(999)

1,302

(21)

1,282

–

1,282

171,176

13,143

184,318

409

184,728

178,312

13,143

191,455(2,403)

189,051

Items that will not be reclassified to
profit or loss
Net change in fair value of financial
assets measured through othercomprehensive income
Remeasurements of defined benefit
plans
Share of other comprehensive incomeof investments accounted for using
equity method
Total of items that will not bereclassified to profit or loss
Items that may be reclassified to profit
or loss
Exchange differences on translationof foreign operations
Effective portion of change in fairvalue of cash flow hedges
Share of other comprehensive incomeof investments accounted for using
equity method
Total of items that may bereclassified to profit or loss
Total

169

31. Discontinued Operations(1) US building materials business
BRIDGESTONE AMERICAS, INC., a US subsidiary of the Company, has concluded an agreementwith LafargeHolcim Ltd., a Swiss building materials manufacturer, regarding the sale of FSBP, asubsidiary of BRIDGESTONE AMERICAS, INC. in the Americas segment, to Holcim Participations(US) Inc., the US subsidiary of LafargeHolcim Ltd., on January 6, 2021 (local time), and the sale wascompleted on March 31, 2021.
Therefore, FSBP and its subsidiaries are classified as discontinued operations.
1) Profit or loss from discontinued operations
Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)

Yen in millions

Yen in millions

Profit or loss from discontinued operations
Income (Note)
Expenses

(620)
–

–
–

Profit (loss) before tax from discontinued operations
Income tax expense (Note)

(620)
27

–
–

Profit (loss) from discontinued operations

(594)

–

(Note)

An adjustment of negative 620 million yen on gain on sale relating to the transfer of FSBP due to achange in the sales price is included in the previous fiscal year.
The income tax expense corresponding to that was 157 million yen.

2) Cash flow from discontinued operations

Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)

Yen in millions

Yen in millions

Cash flow from discontinued operations
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities–(1,359)––Net cash provided by (used in) financing activities––(1,359)–Total(2) Anti-vibration rubber business
On December 10, 2021, the Company made the decision to transfer its anti-vibration rubber business(the “Business Operations”) to AZ. This entails the Group establishing a new wholly-owned subsidiary(PROSPIRA CORPORATION) to which it would transfer the Business Operations by carrying out anabsorption-type demerger (the “Corporate Demerger”), then integrating the Business Operations of theGroup into PROSPIRA CORPORATION, and subsequently transferring all shares of PROSPIRACORPORATION to AZ (the “Share Transfer,” with the Corporate Demerger and the Share Transfer
hereinafter referred to as the “Business Transaction”). The Group completed the Business Transaction on
September 1, 2022. The Group plans to conduct separate transfer targeting a company at a later time.
The Group has accordingly classified the Business Operations of the Company, Bridgestone APM
Company, and Bridgestone Industrial Products (Thailand) Co., Ltd. as discontinued operations as well as
Prospira Corporation, Prospira Manufacturing Japan Co., Ltd, Prospira Ntec Japan Co., Ltd, ProspiraIndia Automotive Products Private Limited, Prospira (Thailand) Co., Ltd., Prospira America Corporation
and Prospira China Co., Ltd.
170

1) Profit or loss from discontinued operations
Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)

Yen in millions

Yen in millions

Profit or loss from discontinued operations
IncomeExpenses (Note)

49,901(64,856)

5,835(1,574)

Profit (loss) before tax from discontinued operations(14,955)

4,262

Income tax expense (Note)

9,350

(850)

Profit (loss) from discontinued operations(5,605)

3,411(Note)

Expenses for the current fiscal year, include a loss on business transfer to AZ of 4,254 million yen
and a loss of 6,147 million yen recognized upon having measured the disposal group consisting of
discontinued operations at fair value less cost to sell. The income tax expense corresponding tothat is 4,294 million yen.
Expenses for the previous fiscal year, include a gain on business transfer to AZ of 3,626 million
yen and a reversal of expenses of 249 million yen recognized upon having measured the disposalgroup consisting of discontinued operations at fair value less cost to sell.

2) Cash flow from discontinued operations
Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)

Yen in millions

Yen in millions

Cash flow from discontinued operations
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities(10,197)(86,825)

467
1,510

Net cash provided by (used in) financing activities

(66)

–

(97,088)

1,976

Total

(3) Chemical products solutions business
On December 10, 2021, the Company made the decision to transfer its chemical products solutions
business (the “Business Operations”) to EUF-2. This entails the Company establishing a new whollyowned subsidiary (ARCHEM INC.) to which it transfers the Business Operations by carrying out anabsorption-type demerger (the “Corporate Demerger”), then integrating the Business Operations of theGroup into ARCHEM INC., and subsequently transferring all shares of ARCHEM INC. to EUF-2,
which is structured, managed, and operated by EU (the “Share Transfer,” with the Corporate Demerger
and the Share Transfer hereinafter referred to as the “Business Transaction”). The Group completed theBusiness Transaction on August 1, 2022.
The Group has accordingly classified Business Operations of the Company, Bridgestone Industrial
Products (Thailand) Co., Ltd., and Archem Philippines, Inc., as discontinued operations as well as
Bridgestone Chemitech Co., Ltd. (BSCT), Bridgestone Diversified Chemical Products Co., Ltd.
(BDCP), Archem Inc., Bridgestone APM Foaming Company, Bridgestone Chemical Products Malaysia
Sdn. Bhd., Archem (Thailand) Co., Ltd., Bridgestone Electronic Materials (Hong Kong) Ltd. (BEM),
Bridgestone (Kaiping) Diversified Products Co., Ltd., Guangzhou Archem Auto Component Co., Ltd.,and Archem (Wuhan) Co., Ltd.

171

1) Profit or loss from discontinued operations
Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)

Yen in millions

Yen in millions

Profit or loss from discontinued operations
Income (Note)
Expenses (Note)
Profit (loss) before tax from discontinued operations(Note)

42,295

2,077(51,534)(999)(9,239)

1,078

Income tax expense (Note)

10,297(114)

Profit (loss) from discontinued operations

1,058

964

Expenses for the previous fiscal year include a gain on business transfer to the EU of 5,691 million
yen and a loss of 13,014 million yen recognized upon having measured the disposal groupconsisting of discontinued operations at fair value less cost to sell. The income tax expense
corresponding to that is 5,080 million yen.
Expenses for the current fiscal year include a gain on business transfer to the EU of 1,165 million
yen.

2) Cash flow from discontinued operations
Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)

Yen in millions

Yen in millions

Cash flow from discontinued operations
Net cash provided by (used in) operating activities(2,949)(234)

Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities(37,854)
(368)

2,006
–

(41,172)

1,772

Total

172

32. Earnings per Share(1) Basic earnings (loss) per share
Basic earnings (loss) per share and its basis for the calculation are as follows:
Previous fiscal year
Current fiscal year
(Year ended December 31, 2022) (Year ended December 31, 2023)
Profit attributable to owners of parent (Yen in millions)

300,305

331,305––

Profit used for calculating basic earnings per share (Yen in
millions)

300,305

331,305

Profit from continuing operations used for calculating basic
earnings per share (Yen in millions)

305,446

326,929

Profit (loss) from discontinued operations used for calculating
basic earnings per share (Yen in millions)(5,141)

4,375

694,823

684,531

Continuing operations (Yen)

439.60477.60Discontinued operations (Yen)(7.40)

6.39

Basic earnings (loss) per share (Yen)432.20483.99Profit not attributable to common shareholders of parent (Yenin millions)

Weighted-average number of shares of common stock(Thousands of shares)
Basic earnings (loss) per share173

(2) Diluted earnings (loss) per share
Diluted earnings (loss) per share and its basis for the calculation is as follows:
Previous fiscal year
Current fiscal year
(Year ended December 31, 2022) (Year ended December 31, 2023)
Profit used for calculating basic earnings per share (Yen in

300,305

331,305––

300,305

331,305

305,446

326,929(5,141)

4,375

694,823

684,531953

821

695,776

685,352

Continuing operations (Yen)

439.00477.02

Discontinued operations (Yen)(7.39)

6.38

Diluted earnings (loss) per share (Yen)

431.61483.41

millions)
Adjustment to profit (Yen in millions)
Profit used to calculate diluted earnings per share (Yen in
millions)
Profit from continuing operations used to calculate diluted
earnings per share (Yen in millions)
Profit (loss) from discontinued operations used to calculate
diluted earnings per share (Yen in millions)
Weighted-average number of shares of common stock(Thousands of shares)
Increase in common stock
Increase from stock options (Thousands of shares)
Weighted-average number of shares of common stock after
dilution (Thousands of shares)
Diluted earnings (loss) per share

33. Cash Flow Information
Changes in liabilities arising from financing activities
The changes in liabilities arising from financing activities are as follows:
Previous fiscal year (Year ended December 31, 2022)
Changes without cash flows

Acquisition

Exchangedifferences ontranslation offoreign
operations

Other

As of
December 31,
2022

Yen inYen inYen inYen inYen inmillions
94,097

millions(53,560)

millions

millions
11,010

millions–

Short-term borrowings
Bonds

62,996
349,554

21,595(40,000)––

Lease liabilities

304,491(65,810)811,139(137,775)

As of January
1, 2022

Changes withcash flows

Yen inLong-term borrowings

Total liabilities related tofinancing activities

174–

millions
51,548

7,655
–

–
102

92,247
309,656

59,651

21,752(6,368)313,716

59,65140,418(6,266)

767,167

Current fiscal year (Year ended December 31, 2023)
Changes without cash flows
As of January
1, 2023

Changes withcash flows

Yen inmillions

Yen inmillions

Acquisition

Exchangedifferences ontranslation offoreign
operations

Other

As of
December 31,
2023

Yen inmillions

Yen inmillions

Yen inmillions

Yen inmillions

Long-term borrowings
Short-term borrowings

51,54892,2472,439
20,873––

5,376
10,953

4,675–

64,038124,073

Bonds
Lease liabilities

309,656
313,716–(68,401)–
71,186–
15,796

96–309,752
332,297

767,167(45,089)

71,18632,125

4,771

830,160

Total liabilities related tofinancing activities

34. Share-based Payment
The Group has adopted the stock option plan, the PSU plan, the RSU, etc. plan and restricted share-based
remuneration plan. The details of the stock option plan are presented in “1. Information on Stock, etc.” of“IV. Information about Reporting Company,” and those of the PSU, the RSU, etc. in “4. Corporate
Governance, etc.” of “IV. Information about Reporting Company.”(1) Stock option plan
The Group has not granted any new stock options since July 5, 2017.
1) Terms of the contracts, etc.
Resolution at Annual
Shareholders’ Meeting
and Board of Directors’Meeting held on March
26, 2009

Resolution at Annual
Shareholders’ Meeting
and Board of Directors’Meeting held on March
30, 2010

Resolution at Annual
Shareholders’ Meeting
and Board of Directors’Meeting held on March
29, 2011

Resolution at Annual
Shareholders’ Meeting
and Board of Directors’Meeting held on March
27, 2012

Nine directors of theCompany and 20
corporate officers notconcurrently serving as
directors of the Company

Eight directors of theCompany and 25
corporate officers notconcurrently serving as
directors of the Company

Nine directors of theCompany and 36
corporate officers notconcurrently serving as
directors of the Company

Nine directors of theCompany and 35
corporate officers notconcurrently serving as
directors of the Company

shares granted

Common stock: 110,000
sharesCommon stock: 118,500
sharesCommon stock: 154,500
sharesCommon stock: 202,000
sharesDate of grantMay 1, 2009

May 6, 2010

May 2, 2011

May 1, 2012

Vesting conditions

No vesting condition

No vesting condition

No vesting condition

No vesting condition

Target service period

No specified service
periodNo specified service
periodNo specified service
periodNo specified service
periodExercise period

From May 1, 2009 to
April 30, 2029

From May 6, 2010 toApril 30, 2030

From May 2, 2011 toApril 30, 2031

From May 1, 2012 toApril 30, 2032

Persons granted

Class and number of175

Resolution at Annual
Shareholders’ Meeting
and Board of Directors’Meeting held on March
26, 2013

Resolution at Annual
Shareholders’ Meeting
and Board of Directors’Meeting held on March
25, 2014

Resolution at Annual
Shareholders’ Meeting
and Board of Directors’Meeting held on March24, 2015

Resolution at Board of
Directors’ Meeting heldon April 21, 2016

Persons granted

Four directors of theCompany and 36
corporate officers notconcurrently serving as
directors of the Company

Four directors of theCompany and 46
corporate officers notconcurrently serving as
directors of the Company

Three directors of theCompany and 48
corporate officers notconcurrently serving as
directors of the Company

Two directors of theCompany excluding nonexecutive directors, eightexecutive officers notconcurrently serving as
directors and 41
corporate officers

Class and number ofshares granted

Common stock: 196,000
sharesCommon stock: 131,900
sharesCommon stock: 142,500
sharesCommon stock: 208,800
sharesDate of grantMay 1, 2013

May 1, 2014

May 1, 2015

May 6, 2016

Vesting conditions

No vesting condition

No vesting condition

No vesting condition

No vesting condition

Target service period

No specified service
periodNo specified service
periodNo specified service
periodNo specified service
periodExercise period

From May 1, 2013 toApril 30, 2033

From May 1, 2014 toApril 30, 2034

From May 1, 2015 toApril 30, 2035

From May 7, 2016 to
May 6, 2036

Resolution at Board of
Directors’ Meeting heldon April 27, 2017
Plan A

Resolution at Board of
Directors’ Meeting heldon April 27, 2017
Plan B

Persons granted

Two directors of theCompany excluding nonexecutive directors, fiveexecutive officers notconcurrently serving as
directors and 45
corporate officers

One executive officer notconcurrently serving as
director and two
corporate officers

Class and number ofshares granted

Common stock: 206,500
sharesCommon stock: 14,300
sharesDate of grantMay 12, 2017

July 5, 2017

Vesting conditions

No vesting condition

No vesting condition

Target service period

No specified service
periodNo specified service
periodExercise period

From May 13, 2017 to
May 12, 2037

From July 6, 2017 to July
5, 20372) Changes in the number of stock options
Previous fiscal year
(Year ended December 31, 2022)

Balance as of beginning of period
Effect of share split

Current fiscal year
(Year ended December 31, 2023)

Number of shares

Weighted-average
exercise price

Number of shares

Weighted-average
exercise price

SharesYen

SharesYen

1,025,200–

1–

882,400–

1–

GrantedExercised–
142,800–1–
125,400–
1

Forfeited

–

–

–

–

Ending balance

882,400

1

757,000

1

Exercisable balance as of end of period

882,400

1

757,000

1176

(Note 1)

The number of stock options is presented by converting it into the number of shares.

(Note 2)All the stock options have been granted at an exercise price of 1 yen per share.

(Note 3)

The weighted-average stock price of the exercised stock options at exercise during the period is5,647 yen for the current fiscal year. As for the previous fiscal year, it was 4,855 yen.

(Note 4)

The weighted-average remaining contractual lives of the outstanding stock options as of theprevious fiscal year-end and the current fiscal year-end were 11.8 years and 10.8 years,
respectively.

(2) PSUAs previously mentioned, the Group has introduced the PSU.
Previous fiscal year
Current fiscal year
(Year ended December 31, 2022) (Year ended December 31, 2023)
Number of shares granted (Shares)

71,20076,100Weighted-average fair value at grant date (Yen)

5,052

4,979

(Note) The carrying amounts of liabilities arising from share-based remuneration transactions are 1,224
million yen and 1,305 million yen as of the previous fiscal year-end and the current fiscal year-end,
respectively.
(3) RSU, etc.
As previously mentioned, the Company has introduced the RSU, etc.
The carrying amounts of liabilities arising from share-based remuneration transactions are 260 million
yen and 267 million yen as of the previous fiscal year-end and the current fiscal year-end, respectively.
(4) Restricted share-based remuneration plan
The Company has introduced a share-based remuneration plan to grant restricted shares to corporate
executive managers, executive managers, and associate directors from January 2021 with the aim ofsharing values with shareholders regarding stock price fluctuation, thereby incentivizing them to make acontribution toward an increase in the stock price and corporate values of the Company.
This plan grants allotment of the Company’s common stock to those eligible for the allotment by
providing monetary remuneration claims, and those eligible persons pay all of said monetary
remuneration claims in the form of contribution in kind. The Company concludes a restricted shareallotment agreement with those eligible for the allotment whereby they are restricted to transfer the
allotted common stock of the Company to a third party, pledge them as collateral and dispose of themfor a certain period prescribed in the allotment agreement (hereinafter, the “Transfer Restriction Period”)(such restrictions are hereinafter referred to as the “Transfer Restriction”).
The Transfer Restriction shall be lifted for all of the restricted shares as of the expiry of the Transfer
Restriction Period on the condition that those eligible for the allotment continued to assume thepositions of corporate executive manager, executive manager, and associate director (hereinafter, the“Positions Eligible for Allotment”) during the Transfer Restriction Period. However, when those eligible
for the allotment lose the status of Positions Eligible for Allotment of the Company before the expiry of
the Transfer Restriction Period with a reason deemed valid by the Global CEO following thedeliberations of Officer Nomination and Compensation Meeting of the Company, the Transfer
Restriction shall be lifted at a point in time immediately following the said loss of the positions.
Meanwhile, when there are shares for which the Transfer Restriction is not lifted as of the expiry of theTransfer Restriction Period, the Company will acquire such restricted shares without consideration per
its scheme.

177

Previous fiscal year (Note 2)
Current fiscal year
(Year ended December 31, 2022) (Year ended December 31, 2023)
From February 28, 2022 toMarch 31, 2022

March 1 and August 25, 2023

Number of shares granted (Shares)

104,800

83,360Fair value at grant date (Yen) (Note 1)

4,915

4,982

Equity-settled

Equity-settled

From February 28, 2022 toFebruary 28, 2025

From March 1, 2023 to
December 31, 2025

Date of grantSettlement method
Transfer Restriction Period(Note 1) Fair value is measured based on the average of the daily closing prices of the Company’s common
stock on the Tokyo Stock Exchange for the one month immediately preceding the resolution dateof the Board of Directors.
(Note 2) This includes Special Award granted in February 2022 to the executive officers.
(5) Share-based remuneration expenses
Share-based remuneration expenses included in the “Selling, general and administrative expenses” in the
consolidated statement of profit or loss are as follows:(Yen in millions)
Previous fiscal year
Current fiscal year
(Year ended December 31, 2022) (Year ended December 31, 2023)
Stock option

–

–

PSU

997

1,211

RSU, etc.

260

183

Restricted share-based remuneration

515

415

178

35. Financial Instruments(1) Capital management
Capital management in the Group prioritizes strategic growth investment that is more focused primarily
on strengthening earning power, constructing a sustainable premium brand, and creating value, and also
aims to improve capital efficiency in order to maintain a strong financial position and to return anappropriate level of profit to our shareholders.
As management indicators, the Group utilizes ROE and ROIC as items to be managed for measuring
capital efficiency. The Group will also construct and implement a financial strategic foundation which
supports the Mid-Term Management Plan through the realization of portfolio management by“strengthening earning power” using ROIC and conducting a financial assessment at the planning andacting stage of investments.
(2) Matters related to risk management
The Group is exposed to financial risks (e.g., credit risk, liquidity risk, foreign exchange fluctuation risk,interest rate fluctuation risk and market price fluctuation risk) in the process of its management activities
and it manages risks based on a specific policy in order to avoid said risks.
(3) Credit risk management
The Group is exposed to credit risk such as a counterparty’s default on contractual obligations resulting
in financial losses to the Group. For trade receivables, the Group regularly monitors the financial
position of significant customers and manages the due dates and the receivables balance of eachcustomer to minimize the risk of defaults resulting from deterioration of a customer’s financial position,
and when full or partial collection of the receivables is considered impossible, or extremely difficult, it isdeemed to be a default. The Group enters into derivative transactions only with highly rated financial
institutions in order to minimize counterparty risk.
The carrying amounts after impairment presented in the consolidated statement of financial position
represent the Group’s maximum exposure to credit risk of financial assets.
The Group’s credit risk exposure related to notes and accounts receivable, etc. is as follows: The Groupmeasures the future expected credit losses to record allowance for doubtful accounts on notes andaccounts receivable, etc., taking into account probability of recoverability and if there has been asignificant increase in credit risk, etc. Whether credit risk increases significantly or not, it is assessed
based on the changes in the default risk. For this purpose, the financial condition of the counterpart, pastexperience, provisions that have already been recorded and past due information are taken into
consideration. Allowance for doubtful accounts on trade receivables is always measured at an amountequal to lifetime expected credit losses, which may be measured either on an individual or collective
basis, depending on the nature and size of the transaction. If one or several of the following events that
can affect the estimated future cash flows of the trade receivables adversely occur, the Group assesses
expected credit losses on an individual receivable basis as credit-impaired trade receivables. The Group
does not expose itself to significant concentrations of credit risk from specific supplier or customer.
• Significant financial difficulty of the debtor• A breach of contract such as a default or past due event• The probability that the debtor will enter bankruptcy or other financial reorganization

1791) Credit risk exposure related to trade and other receivables, etc.
Notes and accounts receivable, etc.
(Yen in millions)
Financial assets for which allowance for doubtful
accounts is always measured at an amount equal tolifetime expected credit losses

Total

Financial assets without Financial assets with credit
credit impairment
impairment
Previous fiscal year
(As of December 31, 2022)
Current fiscal year
(As of December 31, 2023)

905,535

18,930924,465929,675

22,153

951,828

Other financial assets(Yen in millions)
Financial assets for which allowance
Financial assets for for doubtful accounts is measured at an
which allowance for amount equal to lifetime expectedcredit losses
doubtful accounts ismeasured at an
Financial assets foramount equal to 12- which credit risk Financial assets
month expected
has increased
with credit
credit losses
significantly since
impairment
initial recognition
Previous fiscal year
(As of December 31, 2022)
Current fiscal year
(As of December 31, 2023)

Total

114,959

145

649

115,753

107,883

118873

108,8742) Changes in allowance for doubtful accounts
Allowance for doubtful accounts against notes and accounts receivable, etc.
(Yen in millions)
Financial assets for which allowance for doubtful
accounts is always measured at an amount equal tolifetime expected credit losses

Total

Financial assets without Financial assets with credit
credit impairment
impairment
Balance as of January 1, 2022

21,09417,08838,182

Increase during period

2,090

3,573

5,663

Decrease during period (utilized)(1,433)(942)(2,375)Decrease during period (reversed)(2,861)(4,099)(6,960)

Other

2,647

2,027

4,674

Balance as of December 31, 2022

21,53817,64739,185

Increase during period

5,429

6,411

11,840Decrease during period (utilized)

(498)

(366)

(864)

Decrease during period (reversed)(2,772)(3,169)(5,941)

Other

1,554

(1,597)(43)

Balance as of December 31, 2023

25,25018,92644,177180

Allowance for doubtful accounts against other financial assets(Yen in millions)
Financial assets for which allowance
Financial assets for for doubtful accounts is measured at an
which allowance for amount equal to lifetime expectedcredit losses
doubtful accounts ismeasured at an
Financial assets foramount equal to 12- which credit risk Financial assets
month expected
has increased
with credit
credit losses
significantly since
impairment
initial recognition

Total

Balance as of January 1, 2022

66

320

600

987

Increase during period

124

96

–

220

Decrease during period (utilized)

–

(139)

–

(139)

Decrease during period (reversed)

(1)

(145)

–

(147)

Other

1

–

49

51

190

131

650

971

Increase during period

0

96

163

259

Decrease during period (utilized)

–

–

–

–

Decrease during period (reversed)

(1)

(109)

(12)

(122)

(125)

–

74

(51)

65

118

874

1,057

Balance as of December 31, 2022

Other
Balance as of December 31, 2023

(4) Liquidity risk management
The Group is exposed to liquidity risk when it is not able to repay liabilities on the due date due todeterioration of the financing environment. Payment terms of payables, such as notes and accounts
payable, and other payables are approximately less than one year.
Based on a cash flow plan that incorporates estimated cash inflows and outflows arising from businessactivities, the Group practices fund management effectively by recognizing the future fund position inadvance based on cash flow projections. The Group also strives to diversify sources of financing such as
borrowings or bonds in order to reduce liquidity risk. In addition, the Group keeps necessary credit
facilities to manage liquidity risk by having commitment lines with several financial institutions.
Balances of financial liabilities (including derivative financial instruments) by due date as of the end ofeach fiscal year are as follows:181

Previous fiscal year (As of December 31, 2022)(Yen in millions)Due after
Due after one Due after two
Due after four
three years
Due after five
year through years throughyears throughthrough fouryears
two years
three years
five years
years

Carrying
amounts

Contractual
cash flows

Within one
year

Trade and other payables

607,498

607,498

607,498

–

–

–

–

–

Bonds and borrowings

453,451

453,795

107,866

132,196

1,042

50,03362,501

100,157

Lease liabilities

313,716

351,572

62,64155,00742,85835,014

27,625

128,427

1,374,665

1,412,865

778,005

187,203

43,90085,047

90,126

228,584

Forward exchange contracts(5,062)(5,062)(5,062)

–

–

–

–

–

Currency swap contracts

7,848

7,848

(358)

8,207

–

–

–

–

Commodity swap contracts

592

592

592

–

–

–

–

–

Interest rate swap contracts(1,297)(1,297)–(1,297)

–

–

–

–

Subtotal

2,081

2,081

(4,828)

6,910

–

–

–

–

Total

1,376,746

1,414,946

773,177

194,11343,90085,047

90,126

228,584

Non-derivative financial liabilities

Subtotal
Derivative financial liabilities (Note)

Current fiscal year (As of December 31, 2023)(Yen in millions)Due after
Due after one Due after two
Due after four
three years
Due after five
year through years throughyears throughthrough fouryears
two years
three years
five years
years

Carrying
amounts

Contractual
cash flows

Within one
year

Trade and other payables

599,240599,240599,240

–

–

–

–

–

Bonds and borrowings

497,863498,110258,087663

50,00061,853

26

127,481

Lease liabilities

332,297373,171

68,96957,88047,72838,46528,225

131,904

1,429,400

1,470,521

926,296

58,54397,728100,318

28,251

259,385

Forward exchange contracts(3,412)(3,412)(3,412)

–

–

–

–

–

Currency swap contracts

20,212

20,212

20,113

64

36

–

–

–

Commodity swap contracts

(269)

(269)

(269)

–

–

–

–

–

Interest rate swap contracts

(336)

(336)

(336)

–

–

–

–

–

Subtotal

16,196

16,196

16,096

64

36

–

–

–

Total

1,445,596

1,486,717

942,392

58,607

97,764

100,318

28,251

259,385

Non-derivative financial liabilities

Subtotal
Derivative financial liabilities (Note)(Note) Receivables and payables incurred by derivative transactions are presented in net amount.
Total amount of committed line and the amount undrawn are as follows:(Yen in millions)
Previous fiscal year
(As of December 31, 2022)
Total amount of committed line

Current fiscal year
(As of December 31, 2023)

170,926

156,013

The amount drawn

2,720

–

The amount undrawn

168,206

156,013182

(5) Foreign exchange risk management
The Group engages in business, such as development, purchase, production, distribution and sales,
globally and conducts international transactions in regions around the world, and therefore, thefluctuation of foreign currency rates has an impact on the Group’s performance.
The Company and certain subsidiaries use principally forward exchange contracts to hedge foreignexchange fluctuation risk identified by currency on a monthly basis for receivables and payables inforeign currencies. When receivables and payables in foreign currencies are expected from forecasted
transactions related to exports and imports, forward exchange contracts and currency option contracts
may be used, depending on exchange rate conditions. In addition, currency swap contracts are used tohedge foreign currency exchange fluctuation risk associated with loans and borrowings denominated inforeign currencies.
The Group limits derivative transactions to actual exposure under internal regulations and does not enter
into derivative transactions for speculative purposes.
Foreign currency sensitivity analysis
For the financial instruments held by the Group at each fiscal year-end, the impact of appreciation of
the foreign currencies against the yen by 1 yen on profit before tax is as follows:
The figures below do not include the impact of translation of financial instruments denominated infunctional currencies, assets and liabilities as well as revenues and costs of foreign operations intoyen. This analysis is based on the assumption that other variable factors (such as balances, interest
rate, etc.) are constant.
(Yen in millions)
Previous fiscal year
Current fiscal year
(Year ended December 31, 2022) (Year ended December 31, 2023)
Profit before tax

(54)

(42)

(6) Interest rate risk management
Some of borrowings, etc. with floating interest rates in the Group are exposed to interest rate fluctuation
risk. The Group uses interest rate swap transactions for the purpose of hedging interest rate risk onborrowings.
The Group limits derivative transactions to actual exposure under internal regulations and does not enter
into derivative transactions for speculative purposes.
Interest rate sensitivity analysis
As for the financial instruments held by the Group at each fiscal year-end, the impact of interest rate
hikes by 1% on profit before tax is as follows:This analysis is applicable to the financial instruments subject to the effects of changes in interest
rates, assuming other variable factors such as the effects of the changes in currency rates remain
constant.
(Yen in millions)
Previous fiscal year
Current fiscal year
(Year ended December 31, 2022) (Year ended December 31, 2023)
Profit before tax

(238)

183

(946)

(7) Market price fluctuation risk management
Investment securities in the Group consist primarily of equity securities of business partners and are
exposed to market price fluctuation risk.
The Group regularly monitors market prices and financial positions of the issuers with whom it has
business relations, and appropriately reviews the status of these securities held by the Group considering
the relationships with the issuers.
Sensitivity of share price fluctuation risk
The sensitivity analysis of the listed stocks the Group holds to share price fluctuation risk is asfollows: The analysis shows the impact of drops in market prices of the listed stocks by 1% on othercomprehensive income before tax effect, assuming other variables remain constant.
(Yen in millions)
Previous fiscal year
Current fiscal year
(Year ended December 31, 2022) (Year ended December 31, 2023)
Other comprehensive income

(384)

(502)

(8) Fair value measurement
The fair value hierarchy of the financial instruments is categorized into the following three levels basedon the inputs to the valuation techniques used.
Level 1: Fair value that is measured by using quoted prices in active markets
Level 2: Fair value, other than Level 1, that is determined by directly or indirectly using theobservable price
Level 3: Fair value determined by using valuation techniques that incorporate unobservable inputs
1) Financial instruments measured at fair value
The methods for measuring of major financial instruments measured at fair value are as follows:(i) Derivative assets and derivative liabilities
Derivative assets and derivative liabilities are included in other financial assets and otherfinancial liabilities, respectively, and these are classified as financial assets and financial
liabilities measured at fair value through profit or loss. These are forward exchange contracts,
currency swap contracts and interest rate swap contracts, etc., which are measured based on themodel using largely observable inputs such as foreign currency rates and interest rates.
(ii) Shares, etc.
Shares, etc. are included in other financial assets, classified into financial assets measured at fairvalue through profit or loss, or financial assets measured at fair value through othercomprehensive income. The shares categorized in Level 1 are the listed stocks traded in active
market, which are measured at a quoted price on the exchange. The shares, etc. categorized in
Level 3 are unlisted stocks, etc., which are primarily measured by using the net asset-based
valuation model (i.e., a method of measuring enterprise value based on the net assets of theshare issuing company, adjusted for any items that should be adjusted due to marked-to-market,
if any).

184

The fair value hierarchy of financial instruments measured at fair value is as follows:
Previous fiscal year (As of December 31, 2022)

Derivative assets
Shares, etc.
Total

Level 1

Level 2

Level 3Total

Yen in millions–

Yen in millions
11,079

Yen in millions–

Yen in millions
11,07938,399–19,251

57,65038,39911,07919,251

68,729–13,160–13,160–13,160–13,160Derivative liabilities
Total

Current fiscal year (As of December 31, 2023)

Derivative assets
Shares, etc.
Total

Level 1

Level 2

Level 3Total

Yen in millions–

Yen in millions
6,450

Yen in millions–

Yen in millions
6,450

50,174–27,937

78,11150,1746,450

27,93784,561–

22,645–22,645–22,645–22,645Derivative liabilities
Total

Transfers between levels of the fair value hierarchy are recognized at the end of each fiscal year.
There was no transfer between Level 1 and Level 2 for the previous fiscal year and the current fiscal
year.
The changes in assets and liabilities measured at fair value by using Level 3 inputs on a recurring
basis from the beginning to the end of the previous and current fiscal years are as follows:
Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)

Yen in millions

Yen in millions

Balance as of beginning of period

16,650Gains and losses
Profit or loss (Note 1)

19,251

97(25)

Other comprehensive income (Note 2)
Purchases(1,971)
3,668

844
7,210

Sale and collection
Other

(220)
1,026

(215)
871

Ending balance

19,251

27,937(Note 1)

Amount is included in “finance income” and “finance costs” in the consolidated statement of profit
or loss.

(Note 2)

Amount is included in “Net change in fair value of financial assets measured through othercomprehensive income” in the consolidated statement of comprehensive income.
The financial instruments categorized as Level 3 in the fair value hierarchy financial assets, areclassified into financial assets measured at fair value through profit or loss, or financial assets
measured at fair value through other comprehensive income for which quoted market prices are notreadily available. The fair values of such financial instruments are calculated based on the Group’s
accounting policy. When measuring the fair values, the Group determines the most appropriate
valuation technique considering the nature of the assets, etc. with reasonably estimated input.
185

In addition, for written put options on shares of a subsidiary granted by the Group to owners of noncontrolling interests, the present value of their exercise price is recognized as financial liabilities(current liabilities). At initial recognition, the amount is reduced from capital surplus.
As for the written put options (carrying amount at the end of the previous fiscal year was 3,771
million yen), which were included in other financial liabilities in the consolidated statement offinancial position, there was no balance as of the end of the current fiscal year since all the rights ofthese put options were exercised.
These financial liabilities are not included in the table above.
2) Financial instruments measured at amortized cost
The methods for measuring the fair value of major financial instruments measured at amortized cost
are as follows:
The table below does not include financial instruments where the carrying amounts of which
reasonably approximate the fair values and it is not material.
Bonds and borrowings
The fair values of bonds are based on the market prices. The fair values of the borrowings arecalculated based on the present value and by discounting the total principal and interest over theremaining term at an interest rate that would be applied if similar borrowings were newly made.
Previous fiscal year (As of December 31, 2022)
Carrying
amounts

Level 1

Level 2

Level 3

Total

Bonds and borrowings

Yen in millions
345,584

Yen in millions–

Yen in millions
342,020

Yen in millions–

Yen in millions
342,020

Total

345,584–

342,020–

342,020

Current fiscal year (As of December 31, 2023)
Carrying
amounts

Level 1

Level 2

Level 3Total

Yen in millions

Yen in millions

Yen in millions

Yen in millions

Yen in millions

Bonds and borrowings

239,789–

238,181–

238,181

Total

239,789–

238,181–

238,181(9) Hedge accounting
Risk management strategy
The Group uses, as derivative transactions, such as forward exchange contracts and currency option
contracts to mitigate foreign currency fluctuation risk associated with the foreign currency-denominatedreceivables and payables as well as foreign currency-denominated forecast transaction. It uses currency
swap contracts, if required, to mitigate risk of changes in currency rate and interest rate associated withthe foreign currency-denominated loans and borrowings. The Group also engages in interest rate swap
contracts, if required, to mitigate risk of changes in interest rate of the borrowings. It uses commodity
swap contracts, if required, to mitigate price fluctuation risk from raw materials. With respect to the
execution and management of derivative transactions, the Group complies with the internal regulations
that stipulate transaction authority, and engages in the derivative transactions with only highly rated
financial institutions to mitigate counterparty credit risk. Hedge ratio is appropriately determined basedon the economic relationship between the hedging instrument and hedged item as well as its risk
management strategies. There is no material ineffective portion of hedge as the Group applies hedge
accounting only when the critical terms of hedging instruments and hedged items match exactly.
The Group uses derivatives when it is economically rational to do so, including the cases where thehedging relationship does not meet the requirements to qualify for hedge accounting.
186

The carrying amounts and changes in fair value of the hedging instruments that qualify for hedge
accounting in each fiscal year are as follows:
Previous fiscal year (As of December 31, 2022)(Yen in millions)
Carrying amount (Note)
Hedging typeHedging instruments

Contract amount
AssetsCash flow hedges

Liabilities

Foreign currency
derivatives

53,281

1,765

105Interest rate derivatives

28,294

1,297–

81,575

3,062

105

Total

Current fiscal year (As of December 31, 2023)(Yen in millions)
Carrying amount (Note)
Hedging typeHedging instruments

Contract amount
AssetsForeign currency
Cash flow hedges

derivatives
Interest rate derivatives

Total

Liabilities

110,415

2,008

499

31,424336–

141,839

2,345

499

(Note) The carrying amounts of these derivatives are recorded in “Other financial assets” or “Other financial
liabilities” in the consolidated statement of financial position, and the amounts due for more than one
year are categorized as non-current assets or non-current liabilities.
The expected duration of cash flows from the cash flow hedges is approximately four months to 12
months for foreign currency contracts, which is expected to be largely the same as the expected durationof the impact on net profit or loss.
For the previous and current fiscal years, there are no material amounts recognized in profit or loss,
which are related to the ineffective portions of hedges and portions excluded from assessment of hedge
effectiveness.
The changes in the cash flow hedge reserve arising from the hedging instruments designated as cash
flow hedges are as follows:187Previous fiscal year (Year ended December 31, 2022)
Effective portion of change in fair value of cash flow hedges
Foreign currency
riskInterest rate risk

Commodity-related
risk

Total

Yen in millions

Yen in millions

Yen in millions

Yen in millions

620

124

–

744

(10,344)
12,105

1,564
–

–
–

(8,780)12,105

Tax effect

(698)

(391)

–

(1,089)Balance as of December 31, 2022

1,683

1,297

–

2,980

Balance January 1, 2022
Other comprehensive income
Amount that occurred during the period (Note 1)
Amount of reclassification adjustment (Note 2)

Current fiscal year (Year ended December 31, 2023)
Effective portion of change in fair value of cash flow hedges
Foreign currency
riskInterest rate risk

Commodity-related
risk

Total

Yen in millions
1,683

Yen in millions
1,297

Yen in millions–

Yen in millions
2,980

Other comprehensive income
Amount that occurred during the period (Note 1)(10,890)(1,280)(28)(12,198)

Amount of reclassification adjustment (Note 2)
Tax effect

9,903
89

–
320

–
–

9,903
409

785

337

(28)

1,094

Balance as of January 1, 2023

Balance as of December 31, 2023

(Note 1)

The changes in fair value of the hedged items used as the basis for recognizing the ineffective
portion match the changes in fair value of the hedging instruments.

(Note 2)

The amount was reclassified as the hedged items affected net profit or loss, and it was recognized
as “Other income,” “Other expenses” or “Finance income” and “Finance costs” in the consolidated
statement of profit or loss.

36. Related Party(1) Related party transactions
Previous fiscal year (Year ended December 31, 2022)
No item to report.
Current fiscal year (Year ended December 31, 2023)
No item to report.
(2) Remuneration for key management personnel
The remuneration for key management personnel of each fiscal year is as follows:
Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)

Yen in millions

Yen in millions

Remuneration and bonuses
Share-based payment
Total

188

802
565

666
423

1,368

1,089

37. Subsidiaries and Associates, etc.
(1) Information on significant subsidiaries
The significant subsidiaries and associates of the Group as of the end of the current fiscal year arepresented in “4. Subsidiaries and associates” of “I. Overview of the Company” of “Part I Information on
the Company.”(2) Loss of control of subsidiaries
Previous fiscal year (Year ended December 31, 2022)
1) Anti-vibration rubber businessa

Sale of subsidiaries
On December 10, 2021, the Group made the decision to transfer its anti-vibration rubber business(hereinafter the “Business Operations”) to AZ. This entails the Group establishing a new
PROSPIRA CORPORATION to which it would transfer the Business Operations by carrying out
an absorption-type demerger (the “Corporate Demerger”), then integrating the Business
Operations of the Group into PROSPIRA CORPORATION, and subsequently transferring all
shares of PROSPIRA CORPORATION to AZ (hereinafter the “Share Transfer,” with the
Corporate Demerger and the Share Transfer hereinafter referred to as the “Business Transaction”).
The Group completed the Business Transaction on September 1, 2022. The Group plans to
conduct separate transfer targeting a company at a later time.
As a result of the sale, the Group has lost its control of PROSPIRA CORPORATION and its
subsidiaries.

The breakdown of assets and liabilities at the time of loss of control of anti-vibration rubber
business, consideration received and the balance of proceeds from sale are as follows.
b

Major breakdown of assets and liabilities as of the date of loss of control(Yen in millions)
Previous fiscal year
(Year ended December 31, 2022)
Breakdown of assets at time of loss of control
Current assets
Non-current assets

108,705
11,407

Breakdown of liabilities at time of loss of control
Current liabilities
Non-current liabilitiesc

12,972
2,848

Cash flows arising from the loss of control(Yen in millions)
Previous fiscal year
(Year ended December 31, 2022)
Consideration received in cash
Of assets at time of loss of control, cash and cash
equivalents
Payments for sale of discontinued operations

082,655(82,655)(Note 1)

Cash flows associated with loss of control are recorded in “Payments for sale of discontinued
operations” under cash flows from investing activities in consolidated statement of cash flows.

(Note 2)

Details on the transactions are presented in Note “31. Discontinued Operations.”

1892) Chemical products solutions businessa

Sale of subsidiaries
On December 10, 2021, the Group made the decision to transfer its chemical products solutions
business (hereinafter the “Business Operations”) to EUF-2. This entails the Group newly
establishing ARCHEM INC. to which it would transfer the Business Operations by carrying out
an absorption-type demerger (hereinafter the “Corporate Demerger”), then integrating theBusiness Operations of the Group into ARCHEM INC., and subsequently transferring all sharesof ARCHEM INC. to EUF-2, which is structured, managed, and operated by EU (hereinafter the“Share Transfer,” with the Corporate Demerger and the Share Transfer hereinafter referred to as
the “Business Transaction”). The Group completed the Business Transaction on August 1, 2022.
The Group plans to conduct separate transfer targeting a company at a later time.
As a result of the sale, the Group has lost its control of ARCHEM INC. and its subsidiaries.

The breakdown of assets and liabilities at the time of loss of control of the chemical products
solutions business, consideration received and the balance of proceeds from sale are as follows.
b

Major breakdown of assets and liabilities as of the date of loss of control(Yen in millions)
Previous fiscal year
(Year ended December 31, 2022)
Breakdown of assets at time of loss of control
Current assets

55,925

Non-current assets
Breakdown of liabilities at time of loss of control

18,761

Current liabilities
Non-current liabilitiesc

22,3093,670

Cash flows arising from the loss of control(Yen in millions)
Previous fiscal year
(Year ended December 31, 2022)
Consideration received in cash0

Of assets at time of loss of control, cash and cash
equivalents

32,932

Payments for sale of discontinued operations(32,932)(Note 1)

Cash flows associated with loss of control are recorded in “Payments for sale ofdiscontinued operations” under cash flows from investing activities in consolidated
statement of cash flows.

(Note 2)

Details on the transactions are presented in Note “31. Discontinued Operations.”

Current fiscal year (Year ended December 31, 2023)
No item to report.
(3) Significant associates and jointly controlled entities
There are no significant associates and jointly controlled entities of the Group.

19038. Commitments
Commitments for the acquisition of assets after the closing date of each fiscal year are as follows:
Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Yen in millions

Yen in millions

Acquisition of property, plant and equipment
Acquisition of intangible assets
Total

87,196
5,406

118,518
6,692

92,602

125,210

39. Subsequent Events(Transfer of fixed assets)
To use our management resources effectively, the Company concluded a transfer agreement on February 16,
2024 to transfer the following fixed assets owned by the Company.
(1) Details of assets to be transferred
Details of assets and location

Gain on transfer

Actual status

Approx. 63.3 billion yen

Company housing

5,695.68 m2

Land
Buildings 9,181.23 m2
Location

4-26-5 Roppongi, Minato-ku, Tokyo(Note 1) We will not be disclosing either the transfer amount or the carrying amount based on ouragreement with the transferee.
(Note 2) The gain on transfer is calculated by subtracting the carrying amount plus the estimatedamount of any expenses associated with the transfer from the transfer amount.
(2) Outline of transferee
The transferee is a company located in Japan, but we will not be disclosing further details based on ouragreement with the transferee.
There are no capital, personnel, business relationships or related party to note between the Company andthe transferee.
(3) Schedule of transfer
Date of conclusion of the agreement
February 16, 2024
Property handover date
May 31, 2024 (scheduled)(4) Impact on profit or loss
In the fiscal year ending December 31, 2024, we plan to record approximately 63.3 billion yen in gainon sale of fixed assets as other income.

191

(2) Other
Quarterly information for the current fiscal year
Three months ended
March 31, 2023

Six months ended
June 30, 2023

Nine months ended
September 30, 2023

Fiscal year ended
December 31, 2023

1,043,541

2,101,706

3,198,144

4,313,800

Profit before tax (Yen in millions)

126,730

244,477

357,065444,154

Profit attributable to owners of parent(Yen in millions)

90,499182,643

266,732

331,305

Basic earnings per share (Yen)132.24266.85389.68483.99(Cumulative period)
Revenue (Yen in millions)(Accounting period)
Basic earnings per share (Yen)First quarter

Second quarter

132.24192

134.61

Third quarter
122.83

Fourth quarter
94.32

2. Non-consolidated Financial Statements, etc.
(1) Non-consolidated Financial Statements
1) Non-consolidated Balance Sheet(Yen in millions)
Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

100,571596*1 320,482
47,2898,406
57,996

318,073457*1 326,704
44,2688,457
41,488*1

28,929*1 107,436*1*1

25,175
19,556(16,895)
592,106*1*1

AssetsCurrent assets
Cash and deposits
Notes receivable
Accounts receivable
Finished products
Work in process
Raw materials and supplies
Short-term loans receivable for subsidiaries andassociates
Accounts receivable-other
Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings, net
Structures, net
Machinery and equipment, net
Vehicles and carriers, net
Tools, furniture and fixtures, net
LandConstruction in progress
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment in securities
Investments in subsidiaries and associates
Investments in subsidiaries and associates,
other than stockLong-term loans receivable for subsidiaries
and associates
Deferred tax assets
Other assets
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets*1

101,108
8,632
44,138
1,441
15,21359,733
22,881
253,146
22,27899,275
8,502
47,525
1,676
16,54357,56334,254
265,338
34,31961,580801,974

51,646800,458

52,55752,59093,231

31,2023,315(28)
1,043,831
1,319,255
1,911,361

193

24,167
21,307(765)
891,593*1

1,276

21,3932,409(0)929,773
1,229,429
2,121,023

(Yen in millions)
Previous fiscal year
(As of December 31, 2022)
Liabilities
Current liabilities
Accounts payable
Current portion of bonds
Lease obligations
Accounts payable - otherAccrued expenses
Income taxes payable
Deposits received
Allowance for losses on business transfer
Asset retirement obligation
Other current liabilities
Total current liabilities
Long-term liabilities
Bonds
Lease obligations
Accrued pension and liability for retirement
benefits
Asset retirement obligation
Other long-term liabilities
Total long-term liabilities
Total liabilities
EquityShareholders’ equity
Common stock
Capital surplus
Capital reserve
Total capital surplus
Retained earnings
Legal reserve
Other retained earnings
Reserve for advanced depreciation of fixed
assetsReserve for special account for advanced
depreciation of fixed assets
General reserve
Retained earnings brought forward
Total retained earnings
Treasury stock
Total shareholders’ equity
Net unrealized gain (loss) and translation
adjustments
Net unrealized gain (loss) on available-for-salesecurities
Deferred gain (loss) on derivative instruments
Total net unrealized gain (loss) and translation
adjustments
Stock acquisition rights
Total equity
Total liabilities and equity*1 102,547–
107*1 63,995*1 30,610
18,152
5,617
5,923
536
13,179240,667

194

Current fiscal year
(As of December 31, 2023)*1

93,205100,000112*1 72,970*1 30,429
63,964
5,859
5,834
–
34,465406,837

310,000
139

210,000
326

44,02841,5062,401
9,770
366,338
607,005

2,596
2,186
256,614
663,451

126,354

126,354

122,079
122,079

122,079
122,079

31,27931,27929,85928,796–

8,903

789,311306,534
1,156,982(136,813)
1,268,602

789,311452,692
1,310,980(135,408)
1,424,005

31,78330,076

1,298

1,183

33,081

31,2592,673
1,304,356
1,911,361

2,308
1,457,572
2,121,023

2) Non-consolidated Statement of Profit or Loss
(Yen in millions)
Previous fiscal year
(Year ended December 31,
2022)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating Income
Interest income
Dividend income
Other
Total non-operating income
Non-operating expenses
Interest expense
Foreign currency exchange loss
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of fixed assets
Gain on sales of investments in securities
Gain on business transfer
Total extraordinary income
Extraordinary loss
Loss on business transfer
Loss on business of subsidiaries and associates
Loss on valuation of investment securities
Total extraordinary loss
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit*1 981,660*1 623,412
358,248*2 250,960
107,288*1

1,007,593*1 608,053
399,540*2 222,484
177,056*1
1,577*1 130,382*1
4,408
136,367*1
1,059*1 144,010*1
7,223
152,292

842
5,969
4,925
11,736
231,918841
18,897
9,015
28,754
300,594

*3

*1,*5
*6

195

Current fiscal year
(Year ended December 31,
2023)

6,189
–
–
6,189
24,561
15,995
6,656
47,213
190,894
18,057
8,497
26,553
164,341*3*4

16,02819,6655,512
41,206––––
341,800
47,141
10,44557,586284,215

3) Non-consolidated Statement of Changes in Equity
Previous fiscal year (Year ended December 31, 2022)(Yen in millions)Shareholders’ equity
Capital surplus
Commonstock

Retained earnings
Other retained earnings
Retainedearnings
brought
forward

Total retained
earnings

259,445

1,111,840

(9)

(9)

259,437

1,111,832(119,042)(119,042)

1,947

–

164,341

164,341

Purchase of treasury stock

(5)

(5)

Disposal of treasury stock

(143)

(143)

Beginning Balance

126,354

Capital reserve

Total capitalsurplus

Legal reserve

122,079

122,079

31,279Reserve foradvanced
General reserve
depreciation of
fixed assets
31,806789,311

Cumulative effects ofchanges in accounting
policies
Restated balance

126,354

122,079

122,079

31,27931,806789,311

Changes in the year
Cash dividends
Reversal of reserve foradvanced depreciation of
fixed assets(1,947)

ProfitNet change in the year
other than shareholders’equityTotal Changes in the YearEnding Balance

–

–

–

–

(1,947)–47,09745,150126,354

122,079

122,079

31,27929,859789,311306,534

1,156,982

StockacquisitionrightsTotal Equity

2,997

1,373,813

Net unrealized gain (loss) and translation
adjustments
Total net
Net unrealized Deferred gain
Total
unrealized gain
gain (loss) on(loss) on
shareholders’(loss) andavailable-forderivative
equitytranslation
sale securities instruments
adjustments

Shareholders’ equity
Treasurystock
Beginning Balance(38,123)

Cumulative effects ofchanges in accounting
policies
Restated balance

1,322,151

48,950(285)

48,665(9)(38,123)

1,322,142(9)
48,950(285)

48,6652,997

1,373,804

Changes in the year
Cash dividends
Reversal of reserve foradvanced depreciation of
fixed assets
Profit(119,042)(119,042)––

164,341

164,341

Purchase of treasury stock(100,033)(100,038)(100,038)

Disposal of treasury stock

1,343

1,199

1,199

Net change in the year
other than shareholders’equity(17,168)

1,583(15,584)(324)(15,909)

Total Changes in the Year(98,690)(53,540)(17,168)

1,583(15,584)(324)(69,448)

Ending Balance(136,813)

1,268,602

31,783

1,298

33,081

2,673

1,304,356

196

Current fiscal year (Year ended December 31, 2023)(Yen in millions)Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Commonstock

Reserve for
Total capital
Reserve for
specialLegal reserve
surplusadvancedaccount for
depreciation
advancedof fixed assets depreciationof fixed assets

Generalreserve

Retainedearnings
brought
forward

Total retained
earnings

789,311306,534

1,156,982(130,053)(130,053)

1,063

–

(8,903)–284,215

284,215

Purchase of treasury stock

(1)

(1)

Disposal of treasury stock

(162)

(162)

Beginning Balance

126,354

Capitalreserve

122,079

122,079

31,27929,859–Changes in the year
Cash dividends
Reversal of reserve foradvanced depreciation of
fixed assets
Provision of reserve for
special account foradvanced depreciation of
fixed assets(1,063)

8,903

ProfitNet change in the year
other than shareholders’equityTotal Changes in the YearEnding Balance

–

–

–

–

(1,063)

8,903–

146,158

153,998

126,354

122,079

122,079

31,27928,796

8,903

789,311452,692

1,310,980

Net unrealized gain (loss) and translation
adjustments
Net
Stock
unrealized
Total net
Deferred gain
acquisition
gain (loss)
unrealized(loss) on
rightsongain (loss) and
derivative
availabletranslation
instruments
for-saleadjustments
securities

Total Equity

Shareholders’ equity

Beginning Balance

Treasury
stock

Total
shareholders’equity(136,813)

1,268,602

31,783

1,298

33,081

2,673

1,304,356

Changes in the year
Cash dividends
Reversal of reserve foradvanced depreciation of
fixed assets
Provision of reserve for
special account foradvanced depreciation of
fixed assets
Profit(130,053)(130,053)

–

–

–

–

284,215

284,215

Purchase of treasury stock

(16)

(17)

(17)

Disposal of treasury stock

1,420

1,258

1,258

Net change in the year
other than shareholders’equityTotal Changes in the YearEnding Balance(1,706)(115)(1,821)(365)(2,186)

1,405

155,403

(1,706)(115)(1,821)(365)

153,216(135,408)

1,424,005

30,076

1,183

31,2592,308

1,457,572

197

Notes to Non-consolidated Financial Statements(Significant accounting policies)
1. Valuation policies and methods for assets(1) Valuation policies and methods for investments in securities
Investments in subsidiaries and associates — The moving-average cost method
Available-for-sale securities
Marketable securities— Fair value(Unrealized gain and loss, net of tax is recorded in equity, and the movingaverage method is used to calculate the cost of securities sold)Non-marketable securities — Primarily the moving-average cost method.
Note that investments provided to limited investment partnerships andother organizations are based on the most recent available financial
statements according to the financial reporting date specified in contracts
with the partnership. They incorporate a net amount of equivalent equity.
(2) Valuation policies and methods for derivatives
Fair value(3) Valuation policies and methods for inventories
The moving-average cost method (for carrying amounts on the balance sheet, method in which carrying
amounts are lowered based on a decline in profitability)
2. Depreciation method for fixed assets(1) Property, plant and equipment
The declining-balance method(2) Intangible assets
The straight-line method
3. Accounting policies for reserves and allowances(1) Allowance for doubtful accounts
In order to reserve for loss from the nonpayment of claims, the actual credit loss rate is used to calculate
the amount to be recorded for general claims, and for designated claims for which there is a concern of
nonpayment, an amount based on the evaluation of potential loss in the receivables outstanding isrecorded.
(2) Allowance for losses on business transfer
In order to reserve for loss arising from a business transfer, the estimated amount to be incurred in the
future is recorded.
(3) Accrued pension and liability for retirement benefits
In order to reserve for retirement benefits for employees, an amount based on the estimated amount ofprojected benefit obligations and pension plan assets as of the current fiscal year-end is recorded.
1) Method of attributing projected benefits to periods
Projected benefits are attributed to periods of service up to the end of the current fiscal year on abenefit formula basis.
198

2)

Method of recognizing unrecognized actuarial gain/loss and past service cost
Past service cost is treated as an expense using the straight-line method over a fixed number ofyears (10 years) within the average remaining years of service of the employees in the year inwhich the past service costs occur.
Actuarial gain/loss is treated as an expense using the straight-line method over a fixed number ofyears (10 years) within the average remaining years of service of the employees in the year inwhich the gain/loss occurs, recorded from the subsequent fiscal year.

4. Accounting policies for revenue and expenses
The Company recognizes revenue at an amount reflecting the amount of consideration to which theCompany expects to be entitled in exchange for transferring the goods and services to the customer based on
the following five-step approach, except for interest and dividend income, etc.:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation
The Company engages in the premium tire business, solutions business, and chemical and industrial
products business.
In these businesses, because customers mainly obtain control over the product at the time of delivery of the
product, the performance obligations are considered to be satisfied at that time, and revenue is recognized at
the time of delivery of the product.
In addition, consideration for performance obligations is mainly received within one year from satisfactionof the performance obligations, and contains no significant financing component.
5. Accounting policies for the translation of foreign currency-denominated assets and liabilities into Japaneseyen
Monetary receivables and payables denominated in foreign currencies are translated into Japanese yen at theexchange rate at the end of the fiscal year. The foreign currency exchange gain and loss from translation arerecognized in profit or loss.
6. Hedge accounting method(1) Hedge accounting method
Deferred hedge accounting is applied.
(2) Hedging instruments and items covered
Instruments

Items covered

Forward foreignexchange contracts

Foreign currency-denominated monetary claims andobligations and forecasted foreign currencydenominated transactions

Foreign currency swaps

Borrowings and bonds

Interest rate swaps

Borrowings

Commodity swaps

Raw materials

199

(3) Hedging policy
Forward exchange contracts are used only to cover actual foreign exchange needs, and currency swap
contracts are made to match the principal amount and term of the hedged foreign currency-denominatedobligation. Interest rate swaps are entered into for the amount of borrowings only. Commodity swaps areentered into for the trade amount of raw materials. It is the Company’s policy not to use any derivativetransactions for speculative purposes.
(4) Method for evaluating the effectiveness of hedges
The validity of hedges is evaluated based on a comparison of accumulated amount of fluctuations in the
cash flow or fluctuations in the market value of the hedged item with the accumulated amount offluctuations in the cash flow or fluctuations in the market value of the hedging instrument.
(Significant accounting estimates)
1.

Impairment on fixed assets(1) Amount recorded in the financial statements for the current fiscal year
(Yen in millions)
Previous fiscal year

Current fiscal year

Property, plant and equipment

253,146

265,338

Intangible assets

22,27834,319(2) Other information that contributes to understanding of users of the financial statements
The notes have been omitted since the same information has been provided in “3. Significant
Accounting Policies (11) Impairment of non-financial assets” in the notes to the consolidated financial
statements.

2.

Recoverability of deferred tax assets and accounting treatment of income taxes payable(1) Amount recorded in the financial statements for the current fiscal year
(Yen in millions)
Previous fiscal year

Current fiscal year

Deferred tax assets

31,202

21,393

Income taxes payable

18,152

63,964(2) Other information that contributes to understanding of users of the financial statements
The notes have been omitted since the same information has been provided in “3. Significant
Accounting Policies (19) Income taxes” in the notes to consolidated financial statements. In addition, as
for the repayment of capital received from BRIDGESTONE AMERICAS, INC., a subsidiary of theCompany, in fiscal year 2021 the Company accounted for the transaction by recognizing deductible
expenses as loss on transfer of shares for tax purposes, while the Company’s investments in subsidiaries
and associates were reduced by the same amount for accounting purposes. In fiscal year 2021, theCompany excluded some deductible expenses to calculate its taxable income with respect to this matter
which gives rise to some uncertain tax treatments under the Japan’s tax law. The Company had engaged
third-party legal, tax professionals, etc. to consider plausible tax treatments and estimate reasonably its
taxable income considering various scenarios and assumptions. As a result, although an effect of 91,100
million yen in total would be imposed on a decrease in income taxes payable and an increase in deferred
tax assets if all the deductible expenses were included in calculating taxable income, the Company
lowered its deferred tax assets by 60,000 million yen in fiscal year 2021, relative to amounts under the
aforementioned accounting treatment, and also continued the same accounting treatment in the previous
200fiscal year. Furthermore, in the current fiscal year, there was also no change in the judgment on thismatter from fiscal year 2021. However, due to progress in use of unused tax losses carryforward, theCompany has lowered its deferred tax assets by 27,241 million yen and increased its income taxes
payable by 32,759 million yen in the current fiscal year, relative to amounts in the case where all the
deductible expenses were included in calculating taxable income. A potential situation whereby theaccounting estimate differs from the final interpretation of Japan’s tax law according to the tax
authorities could materially affect deferred tax assets, income taxes payable, and other amounts for thesubsequent fiscal year.
3.

Accrued pension and liability for retirement benefits(1) Amount recorded in the financial statements for the current fiscal year
(Yen in millions)
Previous fiscal year

Accrued pension and liability for retirement
benefits

Current fiscal year
44,02841,506(2) Other information that contributes to understanding of users of the financial statements
The notes have been omitted since the same information has been provided in “3. Significant
Accounting Policies (13) Employee benefits 2) Post-employment benefits” in the notes to theconsolidated financial statements.
4.

Allowance for losses on business transfer(1) Amount recorded in the financial statements for the current fiscal year
(Yen in millions)
Previous fiscal year

Allowance for losses on business transfer

Current fiscal year
5,923

5,834

(2) Other information that contributes to understanding of users of the financial statements
In order to reserve for a loss expected to be incurred in connection with a transfer of the anti-vibration
rubber business, the amount expected to be incurred in the future was recorded for such losses that canbe reasonably estimated at the end of the current fiscal year.
Note that any unpredictable change in the external environment and other factors may materially affectthe amount of losses on business transfer to be recognized in the financial statements of the subsequentfiscal year.

5.

Valuation of investments in subsidiaries and associates and investments in subsidiaries and associates, otherthan stock(1) Amount recorded in the financial statements for the current fiscal year
(Yen in millions)
Previous fiscal year

Non-marketable investments in subsidiaries
and associates and investments in subsidiaries
and associates

Current fiscal year
854,531853,048(2) Other information that contributes to understanding of users of the financial statements
For non-marketable investments in subsidiaries and associates and investments in subsidiaries andassociates, the Company’s policy is to compare the carrying amount of investments to the actual value
based on the net asset amount of each company, and recognize an impairment loss when the actual value201

declines by 50% or more compared to the carrying amount of investments. Note that in cases where anychange in the external environment and other factors materially affects the actual value, this may also
affect valuation of investments in subsidiaries and associates and investments in subsidiaries andassociates, other than stock for the subsequent fiscal year.
(Changes in presentations)(Non-consolidated statement of profit or loss)
In the previous fiscal year, “Removal and disassembly expense” was disclosed separately in the “Nonoperating Expenses” section. During the current fiscal year, the amount has become immaterial and thisamount is included in “Other.” The non-consolidated financial statements of the previous fiscal year havebeen reclassified to reflect these changes in presentation.
As a result, 1,311 million yen presented as “Removal and disassembly expense” in the “Non-operating
Expenses” section in the non-consolidated statement of profit or loss for the previous fiscal year has been
restated as “Other.”

202

(Non-consolidated balance sheet)*1 Monetary receivables from and payables to subsidiaries and associates(Yen in millions)
Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Short-term monetary receivables

307,558

391,857

Long-term monetary receivables
Short-term monetary payables

93,23164,623

1,276
64,200

2 Guarantees(Yen in millions)
Previous fiscal year
(As of December 31, 2022)(1) Guarantees on commercial papers
issued by BRIDGESTONE

Current fiscal year
(As of December 31, 2023)
70,735EUROPE NV/SA(2) Guarantees on bank borrowings of
employees in consolidated subsidiary(mortgages), etc.
Total(1) Guarantees on borrowings andcommercial papers issued by

102,128

BRIDGESTONE EUROPE NV/SA(2) Guarantees on bank borrowings of
18
70,753203

employees in consolidated subsidiary(mortgages), etc.
Total

16
102,144(Non-consolidated statement of profit or loss)*1 Transactions with subsidiaries and associates(Yen in millions)
Previous fiscal year
(Year ended December 31, 2022)

Current fiscal year
(Year ended December 31, 2023)

Net sales
Purchases, etc.

776,009296,699

803,942
227,045

Transactions other thanoperating transactions

154,590

181,910*2 Selling, general and administrative expenses
Major items and amounts are as follows:(Yen in millions)
Previous fiscal year
(Year ended December 31, 2022)
Freight
Retirement benefit expenses
Depreciation
Research and development
expenses

Current fiscal year
(Year ended December 31, 2023)

107,739
796

68,355
788

4,371

4,788

70,78870,693In the previous fiscal year, selling expenses accounted for approximately 50% of selling, general andadministrative expenses, and in the current fiscal year, selling expenses accounted for approximately 40%.
*3 Gain on sale of fixed assets
Previous fiscal year (Year ended December 31, 2022)
Mainly relates to gains on the sale of land.
Current fiscal year (Year ended December 31, 2023)
Mainly relates to gains on the sale of land.
*4 Gain on business transfer
Current fiscal year (Year ended December 31, 2023)
Mainly due to adjustment of sales price in connection with a transfer of the anti-vibration rubber business.
*5 Loss on business transfer
Previous fiscal year (Year ended December 31, 2022)
Based on the decision and execution to transfer the anti-vibration rubber business and the chemical products
solutions business, the related following expenses were recorded.

204

(Yen in millions)
Anti-vibration rubber business

Chemical products solutions business

Related loss due to business transfer

10,231

4,005

Loss on valuation of shares ofsubsidiaries and associates

3,569

2,787

1,555

2,413

15,356

9,205

Provision of allowance for doubtful
accounts
Total*6 Loss on business of subsidiaries and associates
Previous fiscal year (Year ended December 31, 2022)
Taking into consideration the financial condition of certain subsidiaries and associates, related losses havebeen recorded.
(Tax effect accounting)1

Major components of deferred tax assets and liabilities(Yen in millions)
Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

13,473

12,701

Deferred tax assets
Accrued pension and liability for retirement
benefits(Note)

Investments in subsidiaries and associates
Depreciable assets

20,25911,005(Note)

52,564
10,687

Accrued expenses
Allowance for losses on business transfer(Note)

5,723
1,813

Other

(Note)

21,603

10,408Deferred tax assets subtotal

73,87594,357

Valuation allowance(14,784)(42,236)

Total deferred tax assets

59,092

52,120

Deferred tax liabilities
Reserve for advanced depreciation of fixed assets(13,165)(12,697)–(3,926)(13,444)(12,859)

Reserve for special account for advanced
depreciation of fixed assets
Net unrealized gain (loss) on available-for-salesecurities(Note)

Other(1,280)(Note)(Note)

6,211
1,785

(1,247)

Total deferred tax liabilities(27,890)(30,728)

Deferred tax assets, net

31,202

21,393(Note)

A loss on business transfer was recorded, and includes the deferred tax assets related to the loss.
The breakdown for the previous fiscal year for the anti-vibration rubber business was 8,179
million yen and for the chemical products solutions business was 4,703 million yen. Also, thebreakdown for the current fiscal year for the anti-vibration rubber business was 7,813 million yen
and for the chemical products solutions business was 4,852 million yen.

205

2

Reconciliation of the statutory effective tax rate and the tax burden ratio of income tax after adjustments fortax effect accounting
Previous fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Statutory effective tax rate

30.6%

30.6%

(Adjustments)
Items not categorized as temporary differences(19.5)(12.1)

Valuation allowance
Tax credits for experiment and research expenses

(2.6)
(0.3)

(1.1)
(1.6)

Loss on business transfer (Note)
Adjustment due to the Advance Pricing Agreement

(2.4)

(0.2)

7.9

1.4

Other

0.2

(0.2)

Tax burden ratio of income tax after adjustments fortax effect accounting

13.9

16.8

system(Note)

This is due to losses on the transfer of the anti-vibration rubber business and the chemical
products solutions business.

(Changes in presentations)“Tax credits for experiment and research expenses,” which was included in “Other” in the previous fiscal
year was disclosed separately as a line item in the current fiscal year because the amount became material.
The notes of the previous fiscal year have been reclassified to reflect these changes in presentation.
As a result, the (0.1%) that was displayed as “Other” in the previous fiscal year has been reclassified as “Taxcredits for experiment and research expenses” (0.3%) and “Other” 0.2%.
(Revenue recognition)
As for information that serves as the basis for understanding revenue arising from contracts with customers,
the notes have been omitted since the same information has been provided in “(Significant accounting
policies) 4. Accounting policies for revenue and expenses.”(Significant subsequent events)
Transfer of fixed assets
To use our management resources effectively, the Company concluded a transfer agreement on February 16,
2024 to transfer the following fixed assets owned by the Company.
(1) Details of assets to be transferred
Details of assets and location
Land

Gain on transfer

Actual status

Approx. 63.4 billion yen

Company housing

5,695.68 m2

Buildings 9,181.23 m2
Location 4-26-5 Roppongi, Minato-ku, Tokyo(Note 1) We will not be disclosing either the transfer amount or the carrying amount based on ouragreement with the transferee.
(Note 2) The gain on transfer is calculated by subtracting the carrying amount plus the estimatedamount of any expenses associated with the transfer from the transfer amount.
(2) Outline of transferee
The transferee is a company located in Japan, but we will not be disclosing further details based on ouragreement with the transferee.
There are no capital, personnel, business relationships or related party to note between the Company andthe transferee.
206

(3) Schedule of transfer
Date of conclusion of the agreement
February 16, 2024
Property handover date
May 31, 2024 (scheduled)(4) Impact on profit or loss
In the fiscal year ending December 31, 2024, we plan to record approximately 63.4 billion yen in gainon sale of fixed assets as extraordinary Income.

2074) Non-consolidated supplementary schedules
Schedule of property, plant and equipment, etc.
(Yen in millions)Category

Property,plant andequipment

Intangible
assetsType of assets

Beginning
Balance

Increase

Depreciation
andamortization

Decrease

EndingBalanceAccumulated
depreciation

Buildings

101,108

8,234

1,679

8,388

99,275

203,763

Structures

8,632

1,329

118

1,341

8,502

30,951

Machinery andequipment

44,13820,560335

16,83847,525672,596

Vehicles and carriers

1,441

1,012

5

772

1,676

11,494Tools, furniture andfixtures15,213

15,815350

14,134

16,543

165,173Land

59,733

250

2,420

–

57,563–

Construction in progress

22,88159,01747,644–34,254–

Total

253,146

106,21752,552

41,472

265,338

1,083,977

Total

22,27817,46046

5,373

34,31914,579

Schedule of allowances(Yen in millions)
Account item
Allowance for doubtful accounts
Allowance for losses on business
transfer

Beginning Balance

Increase

Decrease

Ending Balance

16,923643

16,801

765

5,923

–

89

5,834

(2) Details of Major Assets and Liabilities
This information is omitted as the consolidated financial statements are prepared.
(3) Other
No item to report.

208

VI. Administrative Information on the Company’s SharesBusiness year

From January 1 to December 31

Annual Meeting of
Shareholders

March

Record date

December 31

Record dates for dividendsof surplus

June 30 (Interim dividend)
December 31 (Year-end dividend)

Number of sharesconstituting one unit
Sale or purchase of sharesless than one unit

100 shares

Handling office(Special account)
Sumitomo Mitsui Trust Bank, Limited
Stock Transfer Agency Business Planning Department
4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo

Administrator ofshareholders’ register(Special account)
Sumitomo Mitsui Trust Bank, Limited
4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo

Forwarding office–Handling charge forselling or purchase

The amount separately stipulated as the amount equivalent to share brokerage fees

Method of public notice

The method of public notices of the Company shall be electronic public notices;
provided, however, that if the Company is unable to give an electronic public noticebecause of an accident or any other unavoidable reason, public notices of theCompany may be given in “The Nikkei” newspaper published in Tokyo.
(URL for public notice: https://www.bridgestone.co.jp/)

Special benefits forNoshareholders(Note) With regard to shares less than one unit held by the shareholder, a shareholder of the Company may not
exercise any rights other than rights provided in each item of Article 189, paragraph (2) of theCompanies Act, and the right to claim that which is set forth in the Company’s Articles of Incorporation(to claim the right to make additional purchase of shares less than one unit).

209

VII.

Reference Information on the Company

1. Information on the parent company or equivalent of the Company
The Company does not have a parent company or equivalent.

2. Other reference information
From the beginning of the current fiscal year until the filing date of this securities report, the Company has
filed the following documents.
(1) Annual securities report and (The 104th Fiscal
From January 1, 2022 to Filed to Director-General
appendices, and written
Period)December 31, 2022
of Kanto Local Financeconfirmation
Bureau on March 28,
2023.
(2) Internal control report andFiled to Director-General
appendicesof Kanto Local Finance
Bureau on March 28,
2023.
(3) Quarterly securities reports and (First quarter of the
From January 1, 2023 to Filed to Director-General
written confirmations
105th Fiscal Period)
March 31, 2023
of Kanto Local Finance
Bureau on May 15, 2023.
(Second quarter of the From April 1, 2023 to Filed to Director-General
105th Fiscal Period)
June 30, 2023
of Kanto Local Finance
Bureau on August 9, 2023.
(Third quarter of the
From July 1, 2023 toFiled to Director-General
105th Fiscal Period)
September 30, 2023
of Kanto Local Finance
Bureau on November 10,
2023.
(4) Extraordinary securities report Extraordinary securities report based on Article Filed to Director-General19, paragraph (2), item (ix)-2 of the Cabinetof Kanto Local Finance
Office Ordinance on Disclosure of Corporate
Bureau on March 31,
Affairs, etc.
2023.
(5) Extraordinary securities report Extraordinary securities report based on Article Filed to Director-General19, paragraph (2), item (xii) of the Cabinet Office of Kanto Local FinanceOrdinance on Disclosure of Corporate Affairs,
Bureau on April 21, 2023.
etc.
(6) Extraordinary securities report Extraordinary securities report based on Article Filed to Director-General19, paragraph (2), item (iii) of the Cabinet Office of Kanto Local FinanceOrdinance on Disclosure of Corporate Affairs,
Bureau on June 22, 2023.
etc.
(7) Extraordinary securities report Extraordinary securities report based on Article Filed to Director-General19, paragraph (2), item (xii) of the Cabinet Office of Kanto Local FinanceOrdinance on Disclosure of Corporate Affairs,
Bureau on September 28,
etc.
2023.
(8) Extraordinary securities report Extraordinary securities report based on Article Filed to Director-General19, paragraph (2), item (xii) of the Cabinet Office of Kanto Local FinanceOrdinance on Disclosure of Corporate Affairs,
Bureau on February 16,
etc.
2024.
(9) Securities registration
Filed to Director-Generalstatement (Disposals ofof Kanto Local Financetreasury stock as Performance
Bureau on March 28, 2023
Share Units and Restricted
and March 26, 2024.
Stock Units) and appendices(10) Securities registration
Filed to Director-Generalstatement (Disposal of treasuryof Kanto Local Financestock as restricted share-based
Bureau on January 26,
remuneration) and appendices
2024.

210

(11) Notification for revision of
Notification for revision pertaining to thesecurities registration statement securities registration statement filed on March
28, 2023

Filed to Director-Generalof Kanto Local Finance
Bureau on March 31,2023; April 21, 2023; andMay 15, 2023.
(12) Notification for revision of
Notification for revision pertaining to theFiled to Director-Generalsecurities registration statement securities registration statement filed on January of Kanto Local Finance
26, 2024
Bureau on February 16,2024.
(13) Amended shelf registration
Filed to Director-Generalstatement (Straight bonds)of Kanto Local Finance
Bureau on March 31,2023; April 21, 2023; June22, 2023; September 28,
2023; and February 16,
2024.

211

Part II Information About Company Which Provides Guarantee to Reporting Company
No item to report.

212

Independent Auditor’s Report on the Financial Statements
andInternal Control Over Financial Reporting
March 26, 2024
To the Board of Directors ofBridgestone Corporation
KPMG AZSA LLC
Tokyo Office, Japan
Hirotaka Tanaka
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Kentaro Maruta
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Ayumu Nakajima
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant

Report on the Audit of the Consolidated Financial Statements
OpinionWe have audited the accompanying consolidated financial statements of Bridgestone Corporation. (“theCompany”) and its consolidated subsidiaries (collectively referred to as “the Group”) provided in the “Financial
Information” section in the company’s Annual Securities Report, which comprise the consolidated statement offinancial position as at December 31, 2023, and the consolidated statements of profit or loss and comprehensive
income, changes in equity and cash flows for the year then ended, and notes, in accordance with Article 193-2(1)of the Financial Instruments and Exchange Act of Japan.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, theconsolidated financial position of the Group as at December 31, 2023, and its consolidated financial
performance and its consolidated cash flows for the year then ended in accordance with IFRS AccountingStandards as issued by the International Accounting Standards Board prescribed in Article 93 of “the Regulation
on Terminology, Forms, and Preparation Methods of Consolidated Financial Statements” (IFRS AccountingStandards).
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated
Financial Statements section of our report. We are independent of the Group in accordance with the ethicalrequirements that are relevant to our audit of the consolidated financial statements in Japan, and we havefulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit

evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the consolidated financial statements of the current period. These matters were addressed in the context of ouraudit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do notprovide a separate opinion on these matters.
Appropriateness of management’s judgment as to whether an impairment loss should be recognizedon goodwill allocated to the cash-generating units of WEBFLEET SOLUTIONSThe key audit matter
How the matter was addressed in our audit
In the consolidated statement of financial position,
Bridgestone Corporation (hereinafter referred to as“Bridgestone”) recognized goodwill of ¥62,267
million allocated to the cash-generating unit (CGU)of WEBFLEET SOLUTIONS, which represented
approximately 1% of total assets in the consolidated
financial statements. The goodwill arose when
BRIDGESTONE EUROPE NV/SA (hereinafterreferred to as “BRIDGESTONE EUROPE”), a
consolidated subsidiary of Bridgestone, acquired
control of TOMTOM TELEMATICS B.V. (currently
BRIDGESTONE MOBILITY SOLUTIONS B.V.).
As described in Note 3, “Significant accounting
policies, (9) Goodwill and intangible assets” andNote 16, “Impairment of non-financial assets” to theconsolidated financial statements, CGUs to which
goodwill is allocated are tested for impairment atleast annually or whenever it is determined that there
is an impairment indicator. In the impairment
testing, when the recoverable amount is less than the
carrying amount, the carrying amount is reduced to
the recoverable amount, and the resulting decreasein the carrying amount is recognized as an
impairment loss. The recoverable amount isdetermined as the higher of the value in use or thefair value less costs of disposal.
For the current fiscal year, BRIDGESTONEEUROPE used the value in use as the recoverable
amount in the impairment testing of goodwill
allocated to the CGU of WEBFLEET SOLUTIONS.
The future cash flows used for measuring the value
in use were estimated based on the business plan
approved by management for the following three
years and by setting annual growth rates declining
toward the perpetual growth rate in the subsequent
periods. Key assumptions underlying the future cash
flows, such as projected revenue growth rate,
projected increase in EBITDA margin and theperpetual growth rate, involved a high degree of
uncertainty. Accordingly, management’s judgment
thereon had a significant effect on the estimatedfuture cash flows.
In addition, selecting appropriate models and input
data for estimating the discount rate used to measure
the value in use requires a high degree of expertise

In order to assess the appropriateness ofBridgestone’s judgment with respect to whether an
impairment loss should be recognized on nonfinancial assets including goodwill allocated to the
CGU of WEBFLEET SOLUTIONS, we requested
the component auditor of BRIDGESTONEEUROPE to perform an audit.
We then evaluated the report of the component
auditor as to whether sufficient and appropriate audit
evidence was obtained from the following
procedures among others:(1) Internal control testing
Test of the design of Bridgestone’s internal
controls relevant to measuring the value in use
used for the impairment testing on the CGU towhich goodwill is allocated.
(2) Assessment of the reasonableness of theestimated value in use
Assessment of the reasonableness of key
assumptions used in estimating future cash
flows and the rationale for their adoption
through inquiry of management and thepersonnel responsible for the relevant business,in addition to performing the following
procedures:Assessment of consistency between thebusiness plan used to estimate future cash flows
and the business plan approved bymanagement;

Assessment of the precision of management’s
estimation of future cash flows by analyzing
the level of achievement of previous businessplans and the factors contributing to any
deviations;Assessment of projected revenue growth rate
and projected increase in EBITDA margin usedin estimating future cash flows by comparing
them to the historical performance; andAssessments in relation to the discount rate andthe perpetual growth rate by involving avaluation specialist within the network firm of
the component auditor of BRIDGESTONEin valuation.

EUROPE regarding the following:We, therefore, determined that our assessment of theappropriateness of management’s judgment as towhether an impairment loss should be recognized on
goodwill allocated to the CGU of WEBFLEETSOLUTIONS was one of the most significant
matters in our audit of the consolidated financial
statements for the current fiscal year, andaccordingly, a key audit matter.

 assessment of the appropriateness of themodel used to estimate the discount rate
based on subject matters relevant tovaluation and the requirements of accounting
standards;
 assessment of the appropriateness of the
discount rate through understanding of the
input data used in the calculation andcomparison with the discount rate
independently calculated by valuation
specialist using data published by externalorganizations among others; and assessment of the appropriateness of theperpetual growth rate through comparison
with data published by externalorganizations independently obtained byvaluation specialist.
Assessment of the sensitivity to changes in theperpetual growth rate and discount rate
assumptions on management’s judgment as towhether an impairment loss should be recognized.

Appropriateness of management’s judgment as to whether an impairment loss should be recognizedon the non-financial assets including goodwill allocated to the cash-generating units of
BRIDGESTONE EUROPE
The key audit matter
How the matter was addressed in our audit
In the consolidated statement of financial position,
Bridgestone recognized non-financial assets of¥292,758 million, including goodwill of ¥14,469
million allocated to the cash-generating unit (CGU)of BRIDGESTONE EUROPE, which represented
approximately 5% of total assets in the consolidated
financial statements. The goodwill arose when
BRIDGESTONE EUROPE, a consolidated
subsidiary of Bridgestone, acquired control ofseveral companies.
As described in Note 3, “Significant accounting
policies, (9) Goodwill and intangible assets” andNote 16, “Impairment of non-financial assets” to theconsolidated financial statements, CGU to which
goodwill is allocated are tested for impairment atleast annually or whenever it is determined that there
is an impairment indicator. In the impairment
testing, when the recoverable amount is less than the
carrying amount, the carrying amount is reduced to
the recoverable amount, and the resulting decreasein the carrying amount is recognized as an
impairment loss. The recoverable amount isdetermined as the higher of the value in use or thefair value less costs of disposal.
For the current fiscal year, BRIDGESTONEEUROPE used the value in use as the recoverable
amount in the impairment testing of non-financial
assets including goodwill allocated to the CGU of
BRIDGESTONE EUROPE. The future cash flows
used for measuring the value in use were estimatedbased on the business plan approved by management
for the following three years and by setting annual
growth rates declining toward the perpetual growthrate in the subsequent periods. Key assumptions
underlying the future cash flows, such as projected
revenue growth rate, projected increase in EBITDA
margin and the perpetual growth rate, involved ahigh degree of uncertainty. Accordingly,
management’s judgment thereon had a significant
effect on the estimated future cash flows.
In addition, in selecting appropriate models andinput data for estimating the discount rate used tomeasure the value in use requires a high degree ofexpertise in valuation.
We, therefore, determined that our assessment of theappropriateness of management’s judgment as towhether an impairment loss should be recognized on
the non-financial assets including goodwill allocatedto the CGU of BRIDGESTONE EUROPE was oneof the most significant matters in our audit of theconsolidated financial statements for the current
fiscal year, and accordingly, a key audit matter.

In order to assess the appropriateness ofBridgestone’s judgment with respect to whether an
impairment loss should be recognized on nonfinancial assets including goodwill allocated to the
CGU of BRIDGESTONE EUROPE, we requested
the component auditor of BRIDGESTONEEUROPE to perform an audit.
We then evaluated the report of the component
auditor as to whether sufficient and appropriate audit
evidence was obtained from the following
procedures among others:(1) Internal control testing
Test of the design of Bridgestone’s internal
controls relevant to measuring the value in use
used for the impairment testing on the CGU towhich goodwill is allocated.
(2) Assessment of the reasonableness of theestimated value in use
Assessment of the reasonableness of key
assumptions used in estimating future cash
flows and the rationale for their adoption
through inquiry of management and thepersonnel responsible for the relevant business,in addition to performing the following
procedures:Assessment of consistency between thebusiness plan used to estimate future cash flows
and the business plan approved bymanagement;

Assessment of the precision of management’s
estimation of future cash flows by analyzing
the level of achievement of previous businessplans and the factors contributing to any
deviations;Assessment of projected revenue growth rate
and projected increase in EBITDA margin usedin estimating future cash flows by comparing
them to the historical performance; andAssessments in relation to the discount rate andthe perpetual growth rate by involving avaluation specialist within the network firm of
the component auditor of BRIDGESTONEEUROPE regarding the following: assessment of the appropriateness of themodel used to estimate the discount rate
based on subject matters relevant tovaluation and the requirements of accounting
standards; assessment of the appropriateness of the
discount rate through understanding of the
input data used in calculation andcomparison with the discount rate
independently calculated by valuation
specialist using data published by externalorganizations among others; and assessment of the appropriateness of theperpetual growth rate through comparison
with data published by externalorganizations independently obtained byvaluation specialist.

Assessment of the sensitivity to changes in theperpetual growth rate and discount rate
assumptions on management’s judgment as towhether an impairment loss should be recognized.

Appropriateness of uncertain tax treatments related to the repayment of capital received fromBRIDGESTONE AMERICAS, INC.
The key audit matter

How the matter was addressed in our audit

In the consolidated statement of financial position
for the current fiscal year, Bridgestone recognizedincome taxes payable of ¥91,124 million anddeferred tax assets of ¥88,141 million. As describedin Note 18, “Income taxes” to the consolidated
financial statements, Bridgestone received arepayment of capital from BRIDGESTONEAMERICAS, INC., a consolidated subsidiary, in thefiscal year 2021. Bridgestone accounted for thetransaction, which amounted to ¥34,214 million, byrecognizing deductible expenses as a loss on transferof shares for tax purposes. On the other hand,
Bridgestone did not include part of the loss ontransfer of shares for tax purposes in deductible
expenses when calculating income tax expenses foraccounting purposes and applying tax effectaccounting. This is because it was uncertain whether
the tax authorities would accept such tax treatment
as a deductible expense for the full amount of theloss on transfer of shares included in the deductible
expenses for tax purposes. Accordingly, income
taxes payable were ¥32,759 million higher anddeferred tax assets were ¥27,241 million lower inthe current fiscal year compared to when the fullamount of the loss on transfer of shares for tax
purposes was treated as a deductible expense to
calculate income tax expenses for accounting
purposes.

In order to assess the appropriateness of uncertain
tax treatments related to the repayment of capitalreceived from BRIDGESTONE AMERICAS, INC.,
we communicated with the predecessor auditor witha focus on the accounting and tax judgments madein the fiscal year 2021, when the capital was repaid,since this was our initial audit of Bridgestone. In
addition, we:Since it was uncertain whether tax authorities would
accept such tax treatment as a deductible expense forthe full amount of the loss on transfer of shares
related to the repayment of capital received by
BRIDGESTONE AMERICAS, INC., Bridgestone
assumed various scenarios of the tax authorities’
judgment by engaging external legal and tax
professionals. Bridgestone reflected the impact of
the respective uncertainties in these assumed
scenarios within deductible expenses whencalculating income tax expenses for accounting
purposes and applying tax effect accounting, byusing either the expected value method or the most
likely amount method. The assumed scenarios andthe calculation of deductible expenses by using the
expected value method or the most likely amountmethod in each scenario required a high level ofexpertise in interpretation of tax laws and practical
tax judgments and involved a high degree of
uncertainty.
We, therefore, determined that our assessment of theappropriateness of uncertain tax treatments related to
the repayment of capital received fromBRIDGESTONE AMERICAS, INC. was one of theinquired of management about their views as towhether the loss on transfer of shares would be
accepted as a deductible expense for tax
purposes and assessed the consistency of theviews with the tax treatments related to therepayment of capital;

understood the internal controls related to theselection of external legal and tax professionals
used by Bridgestone and the evaluation of theirwork results;inspected the reports on the tax treatments
prepared by the external legal and tax
professionals used by Bridgestone; and

assessed the following by involving a tax
specialist within our network firms:
 the appropriateness of Bridgestone’s
interpretation of tax laws and practical tax
judgments;
 the appropriateness of the judgment on theimpact of respective uncertainties in the
scenarios assumed by Bridgestone; and the accuracy of the calculation of the amountof deductible expenses for the loss ontransfer of shares that reflects the impact of
uncertainties.

most significant matters in our audit of theconsolidated financial statements for the current
fiscal year, and accordingly, a key audit matter.

Other Matter
The consolidated financial statements of the Group for the fiscal year ended December 31, 2022 were audited bypredecessor auditor who expressed an unqualified opinion on those statements on March 28, 2023.

Other Information
The other information comprises the information included in the Annual Securities Report, but does not include
the consolidated financial statements, the non-consolidated financial statements, and our auditor’s reports
thereon. Management is responsible for the preparation and presentation of the other information. The audit
committee is responsible for overseeing the executive officers and directors’ performance of their duties withregard to the design, implementation and maintenance of the reporting process for the other information.
Our opinion on the consolidated financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with theconsolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.

Responsibilities of Management and the Audit Committee for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements inaccordance with IFRS Accounting Standards, and for such internal control as management determines isnecessary to enable the preparation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern in accordance withIFRS Accounting Standards.
The audit committee is responsible for overseeing the executive officers and directors’ performance of theirduties with regard to the design, implementation and maintenance of the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis ofthese consolidated financial statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material

misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. The
selection and application of audit procedures depends on the auditor’s judgment. The selection andapplication of audit procedures depends on the auditor’s judgment.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances, while the objective of the audit is not to express an opinion on theeffectiveness of the Group’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting and basedon the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that amaterial uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.



Evaluate whether the presentation and disclosures in the consolidated financial statements are in accordancewith IFRS Accounting Standards, the overall presentation, structure and content of the consolidated
financial statements, including the disclosures, and whether the consolidated financial statements represent
the underlying transactions and events in a manner that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Group to express an opinion on the consolidated financial statements. We areresponsible for the direction, supervision and performance of the group audit. We remain solely responsible
for our audit opinion.

We communicate with the audit committee regarding, among other matters, the planned scope and timing of theaudit, significant audit findings, including any significant deficiencies in internal control that we identify during
our audit.
We also provide the audit committee with a statement that we have complied with relevant ethical requirements
regarding independence, and communicate with it all relationships and other matters that may reasonably bethought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards
applied.
From the matters communicated with the audit committee, we determine those matters that were of mostsignificance in the audit of the consolidated financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.

Report on the Audit of the Internal Control Report

OpinionWe also have audited the accompanying internal control report of Bridgestone Corporation as at December 31,
2023, in accordance with Article 193-2(2) of the Financial Instruments and Exchange Act of Japan.
In our opinion, the accompanying internal control report, which states that the internal control over financial
reporting was effective as at December 31, 2023, presents fairly, in all material respects, the results of theassessments of internal control over financial reporting in accordance with assessment standards for internalcontrol over financial reporting generally accepted in Japan.

Basis for Opinion
We conducted our audit of the Internal Control Report in accordance with auditing standards for internal control
over financial reporting generally accepted in Japan. Our responsibilities under those standards are further
described in the Auditor’s Responsibilities for the Audit of the Internal Control Report section of our report. We
are independent of the Group in accordance with the ethical requirements that are relevant to our audit of theinternal control report in Japan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our opinion.

Responsibilities of Management and the Audit Committee for the Internal Control ReportManagement is responsible for the design and operation of internal control over financial reporting and the
preparation and fair presentation of the internal control report in accordance with assessment standards forinternal control over financial reporting generally accepted in Japan.
The audit committee is responsible for overseeing and examining the design and operation of internal control
over financial reporting.
Internal control over financial reporting may not completely prevent or detect financial statement misstatements.

Auditor’s Responsibilities for the Audit of the Internal Control Report
Our objectives are to obtain reasonable assurance about whether the internal control report is free from material
misstatement based on our audit of the internal control report and to issue an auditor’s report that includes ouropinion.
As part of our audit in accordance with auditing standards for internal control over financial reporting generally
accepted in Japan, we exercise professional judgment and maintain professional skepticism throughout the audit.
We also:

Perform procedures to obtain audit evidence about the results of the assessments of internal control overfinancial reporting in the internal control report. The procedures for the audit of the internal control report
are selected and performed, depending on the auditor’s judgment, based on significance of effect on thereliability of financial reporting.



Evaluate the overall presentation of the internal control report, including the appropriateness of the scope,
procedures and results of the assessments that management presents.

Obtain sufficient appropriate audit evidence about the results of the assessments of internal control overfinancial reporting in the internal control report. We are responsible for the direction, supervision andperformance of the audit of the internal control report. We remain solely responsible for our audit opinion.

We communicate with the audit committee regarding, among other matters, the planned scope and timing of ouraudit of the internal control report, the results thereof, material weaknesses in internal control identified during
our audit of internal control report, and those that were remediated.
We also provide the audit committee with a statement that we have complied with relevant ethical requirements
regarding independence, and communicate with it all relationships and other matters that may reasonably bethought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards
applied.

Fee-related Information
Fees paid or payable to our firm and to other firms within the same network as our firm for audit and non-audit
services provided to the Company and its subsidiaries are described in “(3) Status of audit” in 4. Status of
Corporate Governance included in Ⅳ. Status of the Company.

Interest required to be disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company and its subsidiaries
which is required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

Notes to the Reader of Audit Report:
The Independent Auditor’s Report herein is the English translation of the Independent Auditor’s Report as
required by the Financial Instruments and Exchange Act of Japan.

Independent Auditor’s Report on the Financial Statements
March 26, 2024
To the Board of Directors ofBridgestone Corporation
KPMG AZSA LLC
Tokyo Office, Japan
Hirotaka Tanaka
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Kentaro Maruta
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Ayumu Nakajima
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Report on the Audit of the Non-Consolidated Financial Statements

OpinionWe have audited the accompanying non-consolidated financial statements of Bridgestone Corporation. (“theCompany”) provided in the “Financial Information” section in the company’s Annual Securities Report, which
comprise the non-consolidated balance sheet as at December 31, 2023, and the non-consolidated statements ofprofit or loss, changes in equity for the year then ended, significant accounting policies, other explanatory
information, and supplementary schedules, in accordance with Article 193-2(1) of the Financial Instruments andExchange Act of Japan.
In our opinion, the accompanying non-consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as at December 31, 2023, and its financial performance for the year then endedin accordance with accounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Non-Consolidated
Financial Statements section of our report. We are independent of the Company in accordance with the ethicalrequirements that are relevant to our audit of the non-consolidated financial statements in Japan, and we havefulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matter
Key audit matter is that matter that, in our professional judgment, was of most significance in our audit of the nonconsolidated financial statements of the current period. This matter was addressed in the context of our audit of the
non-consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide aseparate opinion on this matter.

Appropriateness of uncertain tax treatments related to the repayment of capital received fromBRIDGESTONE AMERICAS, INC.
The key audit matter
How the matter was addressed in our audit
In the non-consolidated balance sheet as of December
31, 2023, Bridgestone Corporation (hereinafterreferred to as “Bridgestone”) recognized income taxes
payable of ¥63,964 million and deferred tax assets of¥21,393 million. As described in Note, “Significant
accounting estimates” to the non-consolidated
financial statements, Bridgestone received a repaymentof capital from BRIDGESTONE AMERICAS, INC., asubsidiary, in the fiscal year 2021. Bridgestone
accounted for the transaction, which amounted to¥34,214 million, by recognizing deductible expenses
as loss on transfer of shares for tax purposes. On theother hand, Bridgestone did not include part of the loss
on transfer of shares for tax purposes in deductible
expenses when calculating income taxes foraccounting purposes and applying tax effectaccounting. This is because it was uncertain whether
tax authorities would accept such tax treatment as adeductible expense for the full amount of the loss ontransfer of shares included in the deductible expenses
for tax purposes. Accordingly, income taxes payable
were ¥32,759 million higher and deferred tax assets
were ¥27,241 million lower in the current fiscal year
compared to when the full amount of the loss ontransfer of shares for tax purposes was treated as adeductible expense to calculate income taxes foraccounting purposes.
Since it was uncertain whether tax authorities would
accept such tax treatment as a deductible expense forthe full amount of the loss on transfer of shares related
to the repayment of capital received by
BRIDGESTONE AMERICAS, INC., Bridgestone
assumed various scenarios of the tax authorities’
judgment by engaging external legal and tax
professionals. Bridgestone calculated deductible
expenses based on these assumed scenarios whencalculating income taxes for accounting purposes andapplying tax effect accounting. The assumed scenarios
and the calculation of deductible expenses whencalculating income taxes for accounting purposes andapplying tax effect accounting required a high level ofexpertise in interpretation of tax laws and practical tax
judgments and involved a high degree of uncertainty.
We, therefore, determined that our assessment of theappropriateness of uncertain tax treatments related to
the repayment of capital received fromBRIDGESTONE AMERICAS, INC. was of mostsignificance in our audit of the non-consolidated
financial statements for the current fiscal year, andaccordingly, a key audit matter.

In our independent auditor’s report on the consolidated
financial statements, we have described our audit
responses to the key audit matter, “Appropriateness of
uncertain tax treatments related to the repayment of
capital received from BRIDGESTONE AMERICAS,
INC.”
Since our audit responses in the audit of the nonconsolidated financial statements of Bridgestone were
substantially the same as those in our audit of theconsolidated financial statements, no further
description is provided in this section.

Other Matter
The non-consolidated financial statements of the Company for the fiscal year ended December 31, 2022 wereaudited by predecessor auditor who expressed an unqualified opinion on those statements on March 28, 2023.

Other Information
The other information comprises the information included in the Annual Securities Report, but does not include theconsolidated financial statements, the non-consolidated financial statements, and our auditor’s reports thereon.
Management is responsible for the preparation and presentation of the other information. The audit committee is
responsible for overseeing the executive officers and directors’ performance of their duties with regard to thedesign, implementation and maintenance of the reporting process for the other information.
Our opinion on the non-consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the non-consolidated financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with the nonconsolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.

Responsibilities of Management and the Audit Committee for the Non-Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the non-consolidated financial statements inaccordance with accounting principles generally accepted in Japan, and for such internal control as management
determines is necessary to enable the preparation of non-consolidated financial statements that are free frommaterial misstatement, whether due to fraud or error.
In preparing the non-consolidated financial statements, management is responsible for assessing the Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern in accordance withaccounting principles generally accepted in Japan.
The audit committee is responsible for overseeing the executive officers and directors’ performance of their duties
with regard to the design, implementation and maintenance of the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Non-Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the non-consolidated financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis ofthese non-consolidated financial statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the non-consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,forgery, intentional omissions, misrepresentations, or the override of internal control. The selection andapplication of audit procedures depends on the auditor’s judgment. The selection and application of audit
procedures depends on the auditor’s judgment.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances, while the objective of the audit is not to express an opinion on theeffectiveness of the Company’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting and based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
non-consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Company to cease to continue as a going concern.



Evaluate whether the presentation and disclosures in the non-consolidated financial statements are inaccordance with accounting principles generally accepted in Japan, the overall presentation, structure andcontent of the non-consolidated financial statements, including the disclosures, and whether the nonconsolidated financial statements represent the underlying transactions and events in a manner that achieves
fair presentation.

We communicate with the audit committee regarding, among other matters, the planned scope and timing of theaudit, significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the audit committee with a statement that we have complied with relevant ethical requirements
regarding independence, and communicate with it all relationships and other matters that may reasonably bethought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the audit committee, we determine those matters that were of mostsignificance in the audit of the non-consolidated financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicatedin our report because the adverse consequences of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.

Fee-related Information
Fee-related information is described in the auditor’s report on the consolidated financial statements.

Interest required to be disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company which is required to bedisclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

Notes to the Reader of Audit Report:
The Independent Auditor’s Report herein is the English translation of the Independent Auditor’s Report as requiredby the Financial Instruments and Exchange Act of Japan.

Cover[Document Submitted][Article of the Applicable Law Requiring
Submission of This Document][Filed to][Date of Submission][Company Name][Company Name (in English)][Position and Name of Representative][Position and Name of Chief Financial
Officer][Location of Head Office][Place Where Available for Public
Inspection]

Internal Control Report
Article 24-4-4, paragraph (1) of the Financial Instruments andExchange Act
Director of the Kanto Local Finance Bureau
March 26, 2024
Bridgestone Corporation
BRIDGESTONE CORPORATION
Shuichi Ishibashi
Member of the Board
Global CEO and Representative Executive Officer
Naoki Hishinuma
Global CFO
Executive Director
3-1-1 Kyobashi, Chuo-ku, Tokyo
Tokyo Stock Exchange, Inc.
(2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo)
Fukuoka Stock Exchange(2-14-2 Tenjin, Chuo-ku, Fukuoka)

1 Basic Framework of Internal Control over Financial Reporting
Member of the Board, Global CEO and Representative Executive Officer Shuichi Ishibashi, as well as Global
CFO and Executive Director Naoki Hishinuma are responsible for designing and operating the Company’s
internal control over financial reporting. They design and operate internal control over financial reporting inaccordance with the basic framework of internal control presented in “On the Setting of the Standards andPractice Standards for Management Assessment and Audit concerning Internal Control Over Financial
Reporting (Council Opinions)” issued by the Business Accounting Council.
Internal control achieves its objectives to a reasonable extent given that all individual components of internal
control are integrated and function as a whole. Therefore, internal control over financial reporting may not fully
prevent or detect misstatements.

2 Scope of Assessment, Assessment Date and Assessment Procedure
Assessment of internal control over financial reporting was performed as of December 31, 2023, which is the
final day of the current fiscal year, in accordance with generally accepted assessment standards for internal
control over financial reporting.
In this assessment, the business processes to be assessed are selected after assessment of internal control thathas a significant impact on overall financial reporting on a consolidated basis (entity-level controls) is
performed, and in consideration of the results of the said assessment. In assessing the said business processes,
an assessment of the effectiveness of internal control is conducted by identifying the key controls that would
have a material impact on the reliability of financial reporting after analyzing the selected business processes
and by assessing the status of design and operation of the said key controls.
The scope of assessment of internal control over financial reporting is determined to be the scope that isnecessary from the viewpoint of materiality of the impact on the reliability of financial reporting regarding theCompany, its consolidated subsidiaries and its entities accounted for using equity method. The materiality of
the impact on the reliability of financial reporting is determined in consideration of the materiality ofquantitative and qualitative impacts. The scope of assessment of business process-level internal control isdetermined reasonably in light of the results of an assessment of company-level internal control carried out
with respect to all business locations excluding immaterial locations.
To determine the scope of assessment of business process-level internal control, “significant business locations”
are selected. They are composed of business locations whose revenue (before elimination of intra-grouptransactions) reaches approximately two thirds of the revenue in the previous fiscal year, as well as otherqualitatively significant business locations. At the selected significant business locations, business processes
leading to revenue, accounts receivable and inventories which are deemed as accounting items that are closely
associated with a company’s business purpose, are included in the scope of the assessment. In addition, thescope of assessment includes other business locations as well as selected significant business locations withrespect to certain business processes. Specifically, business processes that have a high risk of misstatement andrelate to significant accounting items involving estimates and forecasts, and business processes relating to abusiness or operation dealing with high-risk transactions, are added to the scope of assessment as businessprocesses with substantial significance in terms of effects on financial reporting, regardless of whether theyoccur at selected significant business locations.

3 Assessment Result
As a result of the above assessment, we determined that the Company’s internal control over financial reporting
was effective as of the end of the current fiscal year.

4 Additional Matters
No item to report.

5 Significant Matters
No item to report.

Cover[Document Submitted][Article of the Applicable Law Requiring
Submission of This Document][Filed to][Date of Submission][Company Name][Company Name (in English)][Position and Name of Representative][Position and Name of Chief Financial
Officer][Location of Head Office][Place Where Available for Public
Inspection]

Written Confirmation
Article 24-4-2, paragraph (1) of the Financial Instruments andExchange Act
Director of the Kanto Local Finance Bureau
March 26, 2024
Bridgestone Corporation
BRIDGESTONE CORPORATION
Shuichi Ishibashi
Member of the Board
Global CEO and Representative Executive Officer
Naoki Hishinuma
Global CFO
Executive Director
3-1-1 Kyobashi, Chuo-ku, Tokyo
Tokyo Stock Exchange, Inc.
(2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo)
Fukuoka Stock Exchange(2-14-2 Tenjin, Chuo-ku, Fukuoka)

1 Appropriateness of Descriptions in Annual Securities Report
Member of the Board, Global CEO and Representative Executive Officer Shuichi Ishibashi, as well as Global
CFO and Executive Director Naoki Hishinuma have confirmed that this Annual Securities Report for the 105th
fiscal year (January 1, 2023 through December 31, 2023) is reasonably and fairly stated in accordance with the
Financial Instruments and Exchange Act.

2 Significant Matters
There are no significant matters to report.